Boyd Gaming shares tumble after earnings miss

Updated February 20, 2018 - 7:36 pm

Shares of Boyd Gaming Corp. tumbled Tuesday after the market closed as the company’s fourth-quarter earnings missed Wall Street estimates.

The Las Vegas-based company also gave an outlook for this year’s earnings that were weaker than expected. The shares slipped $2.17, or 5.7 percent, to $35.46 in after-hours trading.

Boyd’s fourth-quarter adjusted earnings, which exclude one-off impacts, fell to $25.6 million, or $0.22 per share, compared with $44.3 million, or $0.38 per share, for the same period in 2016, the company said Tuesday. Wall Street analysts were expecting $0.26 cents a share, according to Zacks Investment Research.

Boyd management said during a conference call that cold weather and tougher competition in the Midwest and South would offset strong Las Vegas earnings this year. The opening of a competitor near its Blue Chip casino in Indiana may result in a $15 million effect to earnings, the company said.

The company forecasts adjusted earnings before interest, taxes, depreciation and amortization of between $600 million and $620 million for 2018, including the impact to Blue Chip. The guidance doesn’t include the earnings effect of five casinos the company will finish acquiring later this year.

Boyd posted adjusted earnings before interest, taxes, depreciation and amortization of $596 million in 2017, implying growth next year may be as low as 1 percent.

The company expects the Las Vegas locals casino industry to grow revenue between 4 percent and 5 percent in 2018 amid strong job growth in the Valley and a growing population.

There is about $7 billion worth of projects underway on the Strip and more coming, said Chief Executive Officer Keith Smith. That has helped boost the number of local construction workers by 11,000 to about 70,000, he said.

The company’s guests tend to come more from the construction industry rather than government sector, said Smith.

Net revenues increased to $591 million from $555 million in the fourth quarter of 2016, the company said in a statement Tuesday afternoon. Gross gaming revenues advanced 6.2 percent to $490 million.

Revenue from the company’s Las Vegas locals segment advanced 17 percent to $218 million after Boyd bought Cannery and Eastside Cannery in December 2016.

Total adjusted earnings before interest, taxes, depreciation, and amortization rose 6.9 percent to $148 million.

The company’s net income jumped more than six-fold compared with the year-earlier period, sparked by a $60 million non-cash tax break. The fourth-quarter net income comparison is also impacted by last year’s large one-off asset impairment and loss from discontinued operations.

Net income rose to $82.2 million, or $0.71 per share, compared with $12.2 million, or $0.11 per share, for the same period a year ago.

Contact Todd Prince at 702 383-0386 or tprince@reviewjournal.com. Follow @toddprincetv on Twitter.

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