Boyd Gaming Corp.’s profits and revenue declined in the second quarter because of continued weakness in many regional markets.
The company’s online gaming business in New Jersey, however, was a bright spot.
The Las Vegas-based company said Thursday its net income for the quarter that ended June 30 was $700,000, or earnings of 1 cent per share. A year ago, the company reported net income of $11.6 million, or earnings of 13 cents per share. The quarter a year ago included profits from the sale of a jai-alai facility in Florida.
Boyd Gaming’s net revenue fell 2.2 percent to $722.5 million in the quarter. The largest declines came from its Midwest and South regional properties — a drop of 6.8 percent — and the Midwest casinos the company acquired from Peninsula Gaming, down 5.9 percent.
“Our second-quarter results were below expectations, principally due to continued weakness in casual play,” Boyd Gaming CEO Keith Smith said in a statement. “Despite a tough operating environment, we remain diligently focused on improving our performance and generating long-term growth.”
Borgata in Atlantic City grew revenue 5.2 percent to $181.9 million, which included $6.7 million from its online gaming operations. Borgata also nearly doubled its cash flow, due in part to a $11.8 million property tax settlement with Atlantic City.
Boyd Gaming operates the Borgata’s online presence in partnership with Bwin.party Gaming and is one of six casinos providing Internet wagering in New Jersey. Through June, Borgata holds a 28.2 percent share of New Jersey’s total online gaming revenue, tops in the market and 10 points ahead of the competition.
On a conference call with analysts and investors, Smith said 75 percent of the Borgata’s online customers are newly created player accounts.
“We’ve begun the process of converting those online customers to active Borgata casino customers,” Smith said.
Borgata’s online gaming business lost $1.8 million in the second quarter, but Smith said on the conference call the business broke even in July and expects to break even in the company’s third and fourth quarters. Boyd Gaming said it is learning online gaming is seasonal, with more activity taking place in the fall and winter.
“Our partner (Bwin.party) sees these trends in Europe,” Smith said. “It’s a business we’re learning.”
Revenue from Boyd Gaming’s Las Vegas casino fell less than 1 percent to $148.3 million in the quarter while the company’s downtown casino revenue was down 1 percent to $55.6 million.
Smith said the company is moving forward with plans to upgrade and renovate its restaurant lineup at the Gold Coast, The Orleans and Suncoast. He said some popular restaurants may be reconfigured to attract new customers while the company is still determining if any new brands are needed.
“We plan to re-position some products to speak to a larger audience,” Smith said.
As for downtown, the company told investors the entire Fremont Street area saw unusually low visitation levels in May and June. However, Boyd Gaming increased its market share in downtown Las Vegas during the quarter and visitation had recovered.
Shares of Boyd closed at $11 on the New York Stock Exchange on Thursday, down 27 cents or 2.40 percent.
Contact reporter Howard Stutz at firstname.lastname@example.org or 702-477-3871. Follow @howardstutz on Twitter.