Caesars sees quarterly net loss increase 78 percent

Caesars Entertainment Corp. increased its net loss 78 percent in the first quarter, the casino operator said Wednesday.

The company, which operates more than 50 casinos nationwide, including 10 on or near the Strip, said it lost $386.4 million in the quarter that ended March 31, or a loss of $2.82 per share. A year ago, the company lost $217.6 million, or $1.74 per share.

Net revenue declined 1.9 percent to $2.1 billion.

“Las Vegas remained a bright spot with strength in the hospitality categories, but regional business trends were unfavorably impacted by extreme weather and softness in visitation in the first quarter,” Caesars Chairman Gary Loveman said in a statement.

Analysts, however, focused on the company’s multipronged debt restructuring effort — announced Tuesday — to deal with the most pressing portion of Caesars’ gaming industry-high $23 billion long-term debt.

Under the plan the company won’t reduce any of its total debt, but will eliminate more than $1 billion in obligations that are due in 2015.

KDP Investment Advisors gaming analyst Barbara Cappaert called it a sweeping move, “stripping guarantees, repaying some debt above par, but is not nearly the comprehensive restructuring many investors, like us, were expecting. It certainly sets the stage for one later on, no doubt.”

Union Gaming Group analyst Robert Shore said the “restructuring efforts should be a key topic on the (company’s earnings) call. We think the fundamental earnings should essentially be a nonevent.”

At the outset of the call, however, Loveman said company officials wouldn’t answer any questions about the refinancing. Analysts had only a few questions about the recently completed quarter, and the planned hourlong call lasted just more than 30 minutes.

Cappaert, in a research note to investors following the restructuring announcement, said the company has undertaken 45 capital market transactions among its various entities since two private equity firms completed a $30.7 billion leveraged buyout of the casino operator in 2008.

“It makes investors heads spin at the dizzying pace of capital structure actions, asset sales to related entities and other not so arms lengths transactions in the structure,” Cappaert said. “But that is the point, in our opinion. It has become so complicated and so cumbersome that challenging these moves in bankruptcy would surely take years to sort out.”

Caesars plans to raise $1.75 billion in new debt that will have longer maturity dates, with the proceeds used to pay the 2015 figure.

Meanwhile, the company plans to sell 5 percent of its equity to institutional investors and will pursue listing the shares at a future date.

The company announced the refinancing after the markets closed Tuesday. On Wednesday, shares of Caesars increased 14.12 percent or $2.62 to close at $21.18 on Nasdaq.

During the first quarter, Caesars’ properties in Las Vegas increased revenue 5.6 percent to $794 million in the quarter. Loveman credited the opening of the $550 million Linq, a retail, dining and entertainment development with the High Roller observation wheel as its centerpiece.

Loveman said the High Roller is attracting “thousands of riders a day” with a virtually “all cash business” despite the company not doing much pre-opening marketing for the attraction.

“We didn’t know when it would open, so we’re pleased with its performance,” Loveman said. “Early visitation is quite strong.”

The Linq has helped drive visitation trends at Caesars’ surrounding properties, including the Flamingo, Quad, and Harrah’s Las Vegas.

Caesars opened the casino portion of The Cromwell in April with a full opening planned for May.

“As additional assets come on line later this year and into 2015, we are excited about Caesars’ prospects in Las Vegas,” Loveman said.

On the other side of the spectrum, the company’s four casinos in Atlantic City and Harrah’s Philadelphia saw revenue decline 13.7 percent to $315.3 million. The company said the Atlantic Coast region was hurt by competition and lower property visitation partially driven by extreme winter weather this year.

“We’re troubled by Atlantic City,” Loveman said. “We believe there is too much capacity in the market.”

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

Business
Dig This opens new location In Las Vegas
Remember when you were a kid and played with construction toys in the sand box? Dig This Las Vegas has the same idea, except instead of toy bulldozers, you get to play with the real thing. (Mat Luschek/Review-Journal)
Town Square developer Jim Stuart building again in Las Vegas
Las Vegas’ real estate bubble took developers on a wild ride, something Jim Stuart knows all too well. (Las Vegas Review-Journal)
Salon opens at Veterans Village
T.H.E. Salon, owned by Nicole Christie, celebrated their opening at the Veterans Village with a ribbon cutting ceremony.
Southwest Airlines considering Las Vegas-Hawaii flights
Southwest Airlines CEO Gary Kelly says the airline is "very focused" on Hawaii. Hawaiians have a strong presence in Las Vegas.The city’s unofficial status is “Hawaii’s ninth island.” In 2018, at least 2,958 people from Hawaii moved to Nevada. Of those, 88.7 percent moved into Clark County, according to driver license surrender data. According to the Las Vegas Convention and Visitors Authority, 310,249 people came to Las Vegas from Hawaii in 2018.
Fewer Nevadans are celebrating Valentine's Day
Fewer Nevadans are celebrating Valentine's Day. About 1.2 million Nevadans are expected to celebrate this year, a 5 percent drop from 2018. A growing number of people consider Valentine’s Day over-commercialized. Others weren’t interested in the holiday or had nobody to celebrate with. But spending is expected to rise. Those who do celebrate are buying for more people. The average American is expected to spend about $162 this year for Valentine’s Day, a 57 percent jump from a decade prior. Katherine Cullen, director of industry and consumer insights at NRF
Foreclosures of mansions in Las Vegas
Las Vegas was ground zero for America's foreclosure crisis after the housing bubble burst. (Eli Segall/Las Vegas Review-Journal)
Rick Helfenbein talks about the impact of tariffs on the clothing industry
MAGIC fashion convention showcases men's clothing trends
The MAGIC fashion convention has come to Las Vegas at the Mandalay Bay Convention Center to showcase some of the hottest clothing trends for men. (Nathan Asselin/Las Vegas Review-Journal)
Allegiant Air flight attendants learn how to handle a water landing
Field instructor Ashleigh Markel talks about training prospective flight attendants for Allegiant Air getting live training with a raft for a water landing at the Heritage Park Aquatic Complex in Henderson on Monday. (John Hornberg/Las Vegas Review-Journal)
Smith & Wollensky CEO Michael Feighery speaks
Smith & Wollensky CEO Michael Feighery speaks about the new Smith & Wollensky restaurant coming to the Grand Canal Shoppes at The Venetian in Las Vegas.
Smith & Wollensky CEO Michael Feighery speaks
Smith & Wollensky CEO Michael Feighery speaks about the new Smith & Wollensky restaurant coming to the Grand Canal Shoppes at The Venetian in Las Vegas.
Smith & Wollensky CEO Michael Feighery talks about Las Vegas return
Michael Feighery, CEO of Smith & Wollensky Restaurant Group, discusses the restaurant's upcoming return to the Las Vegas Strip.
Apartments to Come to Hughes Center
Developer Eric Cohen discusses his current building project at the Hughes Center office park in Las Vegas, Thursday, Jan. 31, 2019. Caroline Brehman/Las Vegas Review-Journal
Stratosphere to rebrand to The STRAT
The Stratosphere, a 1,150-foot-tall property in Las Vegas will be renamed The STRAT Hotel, Casino and Skypod.
Local designers’ picks for the Las Vegas Market
The trends that local interior designers are noticing at the Las Vegas Market this year. (Rachel Aston/Las Vegas Review-Journal)
Trends in bath products at Las Vegas Market
Camille Herd, the showroom manager for European Bath Kitchen Tile & Stone, talks about the popularity of free-standing bath tubs. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
Kitchen trends at Las Vegas Winter Market
Las Vegas Winter Market displayed kitchen trends that mirror common dining accessories at Strip eateries. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
Emerging trends in gifts at Las Vegas Market
Julie Smith Vincenti, curator for the First Look showroom tour on gifts and lifestyle, talks about the emerging trends in those categories for this season. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
Las Vegas house prices are rising
Southern Nevada home prices were up 12 percent year-over-year in November.
Caesars Republic Scottsdale
Caesars Entertainment Corp. is building its first non-gaming hotel in the United States in Scottsdale, Arizona. (Caesars Entertainment Corp.)
Interior designer Mikel Welch talks about trends for Las Vegas Market
Interior designer Mikel Welch, who also is the on-camera designer for TLC’s Trading Spaces, discusses the trends he sees for the 2019 Las Vegas Winter Market. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
SHOT Show 2019: MEGGITT Virtual Training
MEGGIT showcases its virtual training system at SHOT Show 2019 in Las Vegas.
MGM delivers 700 meals to TSA workers at McCarran
Chefs at Garde Manger at Mandalay Bay provided 700 meals to federal employees who are affected by the government shutdown. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
SHOT Show 2019: A "nonsemi-automatic” weapon
Brandon Dunham of Nevada-based Franklin Armory show off the company’s new rifle prototype it calls a “nonsemi-automatic” weapon. The gun does not use a gas system to fire.
Las Vegas-based concrete repair company knows how to beat the heat
ART Concrete Solutions, a Las Vegas concrete-repair firm, addresses the challenges of construction in the extreme heat and sun of Las Vegas. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Las Vegas based company brings color to concrete in the desert heat
Semco Modern Seamless Surface, a Las Vegas surface engineering company, knows how to put color in concrete construction in the Vegas heat. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Fun photo booth at World of Concrete
World of Concrete show at the Las Vegas Convention Center sponsored by DeWalt gives conventioneers a chance for photos with giant tools. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
SHOT Show 2019: Laserstar Technologies
Laerstar Technologies showed off their laser engraving machines, that can be used to personalize anything from guns and knives, to medical tools and household items. (Mick Akers/Las Vegas Review-Journal)
World of Concrete Show has big equipment on display
World of Concrete Show has big equipment on display at the Las Vegas Convention Center including an impact crusher, concrete pump and a self-erecting portable concrete batch plant. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Shot Show 2019: Kalashnikov USA shows off new products
Jonathan Mossberg of Kalashnikov USA talks about new products on display at Shot Show 2019 in Las Vegas.
ad-high_impact_4
TOP NEWS
News Headlines
Home Front Page Footer Listing