Boyd reverses loss, but analysts remain skeptical

Boyd Gaming's first-quarter earnings report highlights the gap between the company's upbeat views of its prospects and the more tepid assessments of securities analysts.

Net revenues of $564.9 million in the quarter were a 36 percent gain because limited results from Borgata in Atlantic City were included one year ago. With Borgata completely in the mix, net revenues declined 1.5 percent.

The net loss of $3.5 million, or 4 cents a share, marked a swing from the $8.4 million profit, or 10 cents a share from one year ago. Here, Borgata did not change the outcome.

President and CEO Keith Smith chose to focus on the increase in operating earnings, a measure before interest, taxes, depreciation and amortization deductions, as "giving us confidence that we have reached a turning point for our company. We expect to see further growth for the remainder of the year."

But analyst Justin Sebastiano of Morgan Joseph TriArtisan wrote in a report that he is "not convinced of a (Las Vegas locals) turnaround" and sees continuing weakness in Atlantic City.

Carlo Santarelli of Wells Fargo predicted "limited" revenue growth in the near term, so that profit gains would flow primarily from expense cuts.

Among the Las Vegas locals properties, net revenues of $154.5 million and operating earnings of $39.6 million were both down about 1 percent.

On Fremont Street, revenues rose 3.1 percent to $55.7 million, and operating earnings went up 7.5 percent to $9 million. Boyd executives said profits were hit by rising jet fuel prices on charter flights to Hawaii.

Shares of Boyd rose 61 cents, or 6.8 percent, Tuesday to close at $9.53 on the New York Stock Exchange.

Contact reporter Tim O'Reiley at or 702-387-5290.


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