Caesars Entertainment reports $220.6 million loss in fourth quarter

Despite increases in revenues and operating income, Caesars Entertainment Corp. suffered a $220.6 million net loss in the fourth quarter, due in large part to higher interest expenses.

The Las Vegas-based casino giant said Wednesday revenues increased 2.4 percent in the quarter that ended Dec. 31 to almost $2.2 billion. The company's income from operations grew 61.4 percent, to $211.6 million through higher revenues and a corporate-influenced cost reduction program.

In a statement, Caesars Entertainment said the net loss grew 12.2 percent from a year ago because gains realized in the previous year's quarter from early debt retirements didn't take place in 2011.

Caesars said higher revenues from its Las Vegas properties, coupled with a boost from the company's inter­­national and online businesses in Europe, offset a decline in net revenues at the company's properties in the Midwest and Atlantic City.

Caesars operates 10 casinos on or near the Strip, including Caesars Palace, Harrah's Las Vegas, Planet Hollywood, Bally's Las Vegas and the Rio.

For all of 2011, Caesars Enter­tainment said net revenues were $8.8 billion, up less than 1 percent from 2010.

Caesars Entertainment Chairman Gary Loveman said in a statement that the Strip results in the fourth quarter "bodes well for the success' of projects surrounding its flagship Caesars Palace." The hotel opened the 600-room Octavious Tower in January, is remodeling a second hotel tower and is moving forward on the $550 million Project Linq, a retail, dining and entertainment development that will open in phases starting in 2013.

"The continued growth in Las Vegas was driven by robust international play and higher room and occupancy rates at our properties," Loveman said, adding the company is seeing continued strong group bookings and increased visitation.

KDP Investment Advisor gaming analyst Barbara Cappaert said in a research note that the results point toward "a decent recovery" in Las Vegas.

"However, Atlantic City results will once again be under pressure with the introduction of Revel later this spring as well as potential competition from Massachusetts," Cappaert said. "Other markets should be mostly stable."

Loveman pointed to Caesars' expansion plans in the United States. The company owns 20 percent of two casinos in Ohio -- Horseshoe Cleveland and Horseshoe Cincinnati -- and will manage the developments. The company's partnership with Ohio-based Rock Gaming "is optimistic" about receiving approval for a 3,750 slot-machine casino in Baltimore.

Caesars is also bidding on a casino license in Boston with racetrack operator Suffolk Downs.

The company went public last month with a limited offering of more than 1.8 million shares that were listed on the Nasdaq Global Select Market with a common price of $9. Initial investor interest was strong with the stock price hiting a high of $17.90 on its initial day of trading. Public filings showed many private investors in Caesars intend to sell shares now that there is a public market.

The company's shares closed Wednesday at $11.32, up 46 cents, or 4.24 percent.

Loveman said the stock sale, along with debt extensions, strengthened the company's balance sheet going into 2012.

"We anticipate pursuing similar transactions to bolster our balance sheet as market conditions warrant," Loveman said.

The company had $19.7 billion in long-term debt as of Dec. 31.

"Offsetting the general positives we see are continued high leverage, something that will be difficult to grow out of anytime soon," Cappaert said.

Contact reporter Howard Stutz at hstutz
@reviewjournal.com or 702-477-3871. Follow @howardstutz on Twitter.