Booming local economy helps Station Casinos’ Q1 earnings

Updated May 1, 2018 - 7:38 pm

With the local economy churning, it makes sense that a locals-focused casino company could take advantage.

Executives of Red Rock Resorts Inc., parent company of Station Casinos Inc., told investors Tuesday that Southern Nevada’s supercharged economy has helped them weather construction disruptions at two major properties and the headache of the state’s largest highway construction project.

Company officials said in a first-quarter earnings call that the outlook is bright, with key economic indicators staying positive and the company taking advantage of new technology introduced on its casino floors.

Red Rock reported an 80.8 percent increase in net revenue to $82.1 million and a 2.9 percent improvement in adjusted cash flow to $140.1 million, despite a 1.1 percent decline in revenue to $421 million for the quarter that ended March 31.

Executives said it’s because Las Vegas is doing well in several economic growth categories, and the company has locals casinos properties right in the middle of it all.

Chairman and CEO Frank Fertitta III and Chief Financial Officer Stephen Cootey, as they did in their fourth-quarter earnings report, cited statistics reflecting Southern Nevada’s booming economy and how Station properties were capitalizing.

“With respect to population, Las Vegas is now designated as the fastest-growing major metropolitan statistical area in the United States having posted 2.2 percent growth in 2017,” Cootey said. “Also, the number of residents is at an all-time high with one-third of new arrivals being retirees, a key gaming demographic for us.”

Cootey also cited job and wage growth, increases in home sales and values and the more than $14 billion in capital projects underway around the valley — including Resorts World Las Vegas, Project Neon, the Raiders stadium project and the Las Vegas Convention Center expansion and renovation.

Project Neon has been a double-edged sword for Station, with Palace Station at the southern end of the $1 billion highway construction project possibly disrupting visitation while it provides construction jobs.

“I can tell you from a Las Vegas locals point of view, it definitely has created traffic problems and delays in traffic to get up and down Interstate 15, especially through that bottleneck called the Spaghetti Bowl,” Fertitta said on the call.

“So it’s hard to quantify, but it certainly isn’t helping, I can tell you that.”

Executives said upgrades to the company’s slot systems and the introduction of IGT’s Cardless Connect mobile technology that links the company’s Boarding Pass loyalty card to cellular devices will likely drive future casino revenue.

“The upgrade could be a game-changer from a guest perspective,” Cootey said. “As evidenced by the approximate 6 percent growth in casino revenue we have seen across our non-disrupted properties since its rollout, we believe our prediction (that the system could be a ‘game changer’) is correct.”

Union vote won’t affect earnings

In response to an investor’s question about the recent passage of union representation by Culinary Local 226 at the Palms, Cootey said he doesn’t expect contract negotiations to hurt earnings potential. He also said the company’s management of the Graton Resort & Casino in Rohnert Park, California, for the Federated Indians of Graton Rancheria tribe, is doing remarkably well after the devastating wildfires that scorched nearby Napa Valley wine country.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.

ad-high_impact_4
Business
Neon wraps can light up the night for advertising
Vinyl wrap company 5150 Wraps talks about neon wraps, a new technology that the company believes can boost advertising at night. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Nevada on the forefront of drone safety
Dr. Chris Walach, senior director of Nevada Institute for Autonomous Systems, talks to a reporter at NIAS's new Nevada Drone Center for Excellence of Public Safety, located inside the Switch Innevation Center in Las Vegas. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
Motel 8 on south Strip will become site of hotel-casino
Israeli hoteliers Asher Gabay and Benny Zerah bought Motel 8 on the south Strip for $7.4 million, records show. They plan to bulldoze the property and build a hotel-casino. Motel 8 was built in the 1960s and used to be one of several roadside inns on what's now the south Strip. But it looks out of place today, dwarfed by the towering Mandalay Bay right across the street.
Project billed as one of the world's largest marijuana dispensaries plans to open Nov. 1
Planet 13 co-CEO Larry Scheffler talks about what to expect from the new marijuana dispensary, Thursday, July 19, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Oasis Biotech opens in Las Vegas
Brock Leach, chief operating officer of Oasis Biotech, discusses the new plant factory at its grand opening on July 18. (Bailey Schulz/Las Vegas Review-Journal)
UNLV Tech Park innovation building breaks ground
Construction on the first innovation building at the UNLV Tech Park is underway. (Bailey Schulz/Las Vegas Review-Journal)
Caesars Forum Meeting Center
Caesars broke ground Monday on its $375 million Caesars Forum Meeting Center (convention center) just east of the High Roller observation wheel. (Caesars Entertainment)
Technology reshapes the pawn shop industry
Devin Battersby attaches a black-colored device to the back of her iPhone and snaps several of the inside and outside of a Louis Vuitton wallet. The device, installed with artificial intelligence capabilities, analyzes the images using a patented microscopic technology. Within a few minutes, Battersby receives an answer on her app. The designer item is authentic.
Recreational marijuana has been legal in Nevada for one year
Exhale Nevada CEO Pete Findley talks about the one year anniversary of the legalization of recreational marijuana in Nevada. (K.M. Cannon/Las Vegas Review-Journal)
Young adults aren't saving for retirement
Financial advisors talk about saving trends among young adults. (Bailey Schulz/Las Vegas Review-Journal)
President Trump’s tariffs could raise costs for real estate developers, analysts say
President Donald Trump made his fortune in real estate, but by slapping tariffs on imports from close allies, developers in Las Vegas and other cities could get hit hard.
Las Vegas business and tariffs
Barry Yost, co-owner of Precision Tube Laser, LLC, places a metal pipe into the TruLaser Tube 5000 laser cutting machine on Wednesday, June 20, 2018, in Las Vegas. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Nevada Film Office Connects Businesses To Producers
The director of the Nevada Film Office discusses its revamped locations database and how it will affect local businesses. (Bailey Schulz/Las Vegas Review-Journal)
Opendoor isn't the typical house flipping company
Unlike most house flippers, the company aims to make money from transaction costs rather than from selling homes for more than their purchase price.
The Venetian gondoliers sing Italian songs
Gondolier Marciano sings a the classic Italian song "Volare" as he leads guests through the canals of The Venetian in Las Vegas. (K.M. Cannon/Las Vegas Review-Journal)
Building In Logandale
Texas homebuilder D.R. Horton bought 43 lots in rural Logandale. (Eli Segall/Las Vegas Review-Journal)
Indoor farming in Southern Nevada
Experts discuss Nevada's indoor farming industry. (Bailey Schulz/Las Vegas Review-Journal)
Former Fontainebleau could have become a Waldorf Astoria
Months after developer Steve Witkoff bought the Fontainebleau last summer, he unveiled plans to turn the mothballed hotel into a Marriott-managed resort called The Drew. But if Richard “Boz” Bosworth’s plans didn’t fall through, the north Las Vegas Strip tower could have become a Waldorf Astoria with several floors of timeshare units. (Eli Segall/Las Vegas Review-Journal)
LVCVA CEO Rossi Ralenkotter announces plans to retire
Rossi Ralenkotter, CEO of the LVCVA, on Tuesday confirmed a Las Vegas Review-Journal report that he is preparing to retire. Richard N. Velotta/ Las Vegas Review-Journal
Cousins Maine Lobster to open inside 2 Las Vegas Smith’s stores
Cousins Maine Lobster food truck company will open inside Las Vegas’ two newest Smith’s at Skye Canyon Park Drive and U.S. Highway 95, and at Warm Springs Road and Durango Drive. Cousins currently sells outside some Las Vegas Smith’s stores and at Fremont Street and Las Vegas Boulevard. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas home prices to continue to rise, expert says
Lawrence Yun, chief economist at the National Association of Realtors, gives homebuyers a pulse on the Las Vegas housing market. (Eli Segall/Las Vegas Review-Journal)
NV Energy announces clean energy investment
The company is planning to add six solar projects in Nevada, along with the state's first major battery energy storage capacity. Bailey Schulz/Las Vegas Review-Journal
3 Mario Batali restaurants on Las Vegas Strip to close
Days after new sexual misconduct allegations were made against celebrity chef Mario Batali, his company announced Friday that it will close its three Las Vegas restaurants July 27. Employees of Carnevino Italian Steakhouse, B&B Ristorante and Otto Enoteca e Pizzeria, all located in The Venetian and Palazzo resorts, were informed of the decision Friday morning. Bastianich is scheduled to visit the restaurants Friday to speak to employees about the next two months of operation as well as how the company plans to help them transition to new positions.
Nevada has its first cybersecurity apprenticeship program
The Learning Center education company in Las Vegas has launched the first apprenticeship program for cybersecurity in Nevada. It was approved by the State Apprenticeship Council on May 15. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas union members voting to authorize the right to strike
Thousands of Las Vegas union members voting Tuesday morning to authorize the right to strike. A “yes” vote would give the union negotiating committee the power to call a strike anytime after June 1 at the resorts that fail to reach an agreement. (Todd Prince/Las Vegas Review-Journal)
Small businesses struggle to find qualified candidates
A 2018 survey found that over two-thirds of small businesses in Nevada find it somewhat to very difficult to recruit qualified candidates. Bailey Schulz/Las Vegas Review-Journal
TOP NEWS
News Headlines
Add Event
Home Front Page Footer Listing
Circular
You May Like

You May Like