Let’s just say it was a busy third quarter.
During the three months that ended Sept. 30, Pinnacle Entertainment sold a vacant Atlantic City land parcel, moved forward on rebranding and expanding a Cincinnati-area racetrack casino and progressed with the planned sales of St. Louis casino and western Louisiana development site.
More importantly, the Las Vegas-based regional casino operator began merging rival Ameristar Casinos into the company. Pinnacle completed its $2.8 billion purchase of Ameristar in late August, and the casinos purchased from the acquired entity affected third-quarter earnings.
With 49 days of results from Ameristar’s casinos contributing to the quarter and charges related to the deal, Pinnacle’s quarterly results were skewed, the company said Wednesday.
Pinnacle said its net loss in the quarter was $180.4 million, or $3.07 per share. In the same quarter a year ago, Pinnacle said it lost $358,000, which translated in zero cents per share.
A noncash impairment charge of $144.6 million related to the sale of Lumiere Place in St. Louis and as well as a tax benefit of $62.5 million factored into the results.
Pinnacle’s revenues grew 63.6 percent to $418.9 million, which included contributions from Ameristar but excluded Lumiere. If Pinnacle and Ameristar had been combined during the quarter, total revenues would been $553.9 million.
Analysts called the quarterly results “messy” because of the Ameristar deal, but said actual results should have been expected, given poor regional gaming results reported recently by Penn National Gaming and Boyd Gaming Corp.
“We believe longer-term investors will look through the miss and focus on the Ameristar implementation and the realization of synergies,” Well Fargo Securities gaming analyst Cameron McKnight told investors.
As part of the deal, Pinnacle acquired Ameristar’s two casinos in the Northern Nevada community of Jackpot, near the Idaho border.
Pinnacle CEO Anthony Sanfilippo said the merger of Ameristar into Pinnacle, which doubled the company’s size, has gone “smoothly.” He told investors that in a less than two months, changes in the operation will lead to more than $20 million of recurring annual cost savings, approximately half of the $40 million target the company indicated in announcing this transaction last year.
“The cultural similarities and motivated team members have been catalysts for rapid progress in achieving our integration objectives,” Sanfilippo said. “We now have significantly enhanced scale, distribution and diversification, and are focused on maximizing the synergies between the two companies and the cash flow produced by this fortified platform of gaming properties.”
Shares of Pinnacle closed at $24.33 on the New York Stock Exchange, up $1.61 or 7.09 percent.
Contact reporter Howard Stutz at firstname.lastname@example.org or 702-477-3871. Follow @howardstutz on Twitter.