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Howard Stutz

Regional casino deal helps Boyd Gaming boost profits; shares soar

31 July 2013

LAS VEGAS -- Last year’s acquisition of a regional casino operator helped Boyd Gaming Corporation grow profits and results in the second quarter, the company said Tuesday.

Las Vegas-based Boyd said its net income for the quarter that ended June 30 was $11.6 million, or 13 cents per share. A year ago, the company reported net income of $1 million, or 1 cent per share.

Boyd Gaming said net revenues for the quarter grew 20.3 percent to $738.7 million.

Analysts polled by FactSet Research expected the company to report a break-even net income.

“Overall, we see soft regional performance as in line with recent investor expectations,” JP Morgan gaming analyst Joe Greff told investors.

In November, Boyd Gaming paid $1.3 billion for Peninsula Gaming, which gave the company five additional regional casinos. Revenues for the Peninsula segment were $135.8 million, which attributed for all the company’s overall revenue growth.

Boyd Gaming’s quarterly results also included a gain of $18.9 million from the sale of Dania Jai-Alai facility in Dania, Fla.

“We are making significant progress toward our strategic goals of strengthening our balance sheet and positioning ourselves for continued growth,” Boyd Gaming Chief Executive Officer Keith Smith said in a statement.

Shares of Boyd Gaming, traded on the New York Stock Exchange, closed at $12.85, up $1.99 or 18.32 percent.

Boyd’s Las Vegas properties, which include Sam’s Town and the Coast-branded casinos, said revenues were $149.7 million, up slightly from $149 million. The company’s downtown casinos saw revenues grow to $56.1 million, compared with $55.9 million a year ago.

Greff said the company’s Las Vegas figures were the “result to a better overall promotional environment as well as the benefit from new slot marketing initiatives.”

At the Borgata in Atlantic City, revenues fell 1.4 percent in the quarter to $172.9 million.

Smith said Borgata posted a year-over-year gain when the impact of a tax charge was factored out.

During a conference call with analysts, Boyd executives expressed “cautious optimism” on both the company’s resorts in Las Vegas and the Borgata.

Wells Fargo Securities gaming analyst Cameron McKnight said the Borgata will continue to be the market’s leading casino despite new casino marketing promotions being implemented by the year-old Revel resort, which is coming out of bankruptcy.

“Management expects the Borgata to see top-line growth as the Atlantic City market laps Revel’s opening and customer spending comes back to pre-(Hurricane) Sandy levels,” McKnight told investors.
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