Caesars Entertainment Corp. said it posted record results in Las Vegas over the past three months, during its second-quarter earnings call on Tuesday, despite the national economy possibly slipping towards a recession.
The company reported an all-time-best adjusted pre-tax earnings of $547 million in Las Vegas for the three months ended June 30, up 29.3 percent year over year.
CEO Tom Reeg said its yearly Las Vegas hotel revenue is on pace to surpass $1 billion for the first time, after the previous monthly record of $91 million was broken in all three months of the quarter. Occupancy rates have climbed 97 percent, he said.
“There are not strong enough words to convey how well it’s going in Vegas for us,” Reeg said.
Despite the nation’s gross domestic product falling for two quarters, “the consumer continues to hold up quite well for us,” Reeg added.
Overall, Caesars posted a net loss of $123 million, compared to $71 million in net income in the same quarter last year. Total revenue rose from $2.5 billion in the second quarter last year to $2.8 billion this year.
Reeg said he was encouraged by increased business from the 55-plus demographic and international travelers, two segments that have been down during the COVID-19 pandemic.
Strip property sale?
Reeg offered no update on the potential sale of one of Caesars’ properties on the Strip. Vici Properties, a real estate investment trust spun off from Caesars, has the right of first refusal on a sale, according to securities filings, and the deadline is at the end of summer.
Reeg said he found investors and analysts’ focus on a deal “kind of amusing” since many doubted the need for a sale when it was first proposed but are now concerned that it’s not happening fast enough.
“This is a change in you, not in us. This has been discretionary for us from day 1, and it remains so,” he said. “If we have a trade that makes sense for us, we’ll do it. If we don’t, we’re fine waiting.”
Also on Tuesday’s call:
Caesars’ sports betting operation has held its market share of about 15 percent nationwide despite pulling back nearly $500 million in advertising spending that the company felt was unneeded, Reeg said. “I’m extremely confident that we will be a profitable business at least by the fourth quarter of ’23,” he said.
Caesars is staying out of the race between two competing sports betting ballot initiatives in California. One is backed by major sports betting companies, including BetMGM, DraftKings and FanDuel, but Caesars wants to stay neutral because of its relationships with Native American tribes, some of whom are backing the other measure, Reeg said.
Reeg laughed after an analyst’s question about whether recent heavy rain in Las Vegas that caused water to fall from the roof of Caesars Palace and other casinos would have an impact on the business. “I just took my life jacket off,” Reeg joked. He said there was no effect, and the online videos just made for “some good social media footage.”
Caesars shares, traded on the Nasdaq, rose 6.8 percent Tuesday, closing at $49.17. The stock was down 1.57 percent to $48.40 in after-hours trading.
Contact Jim Barnes at email@example.com or 702-383-0277. Follow @JimBarnesLV on Twitter.
Caesars Entertainment Inc.
Second-quarter revenue and earnings for Reno-based Caesars Entertainment Inc., operators of Caesars Palace, Flamingo, Harrah’s and The Linq Hotel, among other Strip properties. (Nasdaq: CZR)
2Q 2022: $2.82 billion
2Q 2021: $2.50 billion
Net income (loss)
2Q 2022: ($123 million)
2Q 2021: $71 million
Earnings/(loss) per share
2Q 2022: ($0.57)
2Q 2021: $0.34