Updated May 12, 2020 - 9:01 am
The operator of Caesars Palace and eight other Las Vegas resorts on Monday announced it would phase in reopenings with a comprehensive safety and health plan with masked employees across its network of properties.
Caesars Entertainment Corp., in what could be the company’s last quarterly earnings report as a Las Vegas-based company, did not say which properties would open first or when it plans its first opening. A spokeswoman said Caesars doesn’t plan to make its reopening plan public.
Caesars is being acquired by Reno-based Eldorado Resorts Inc. in a $17.3 billion deal expected to close by the end of June.
The transaction must still be reviewed by the Federal Trade Commission and Nevada gaming regulators.
The company’s first-quarter results were slammed by the coronavirus outbreak that resulted in Gov. Steve Sisolak ordering all nonessential businesses, including casinos, to close beginning March 18. Resorts remained closed through April, and companies are only now contemplating when they might reopen.
Caesars’ nine Las Vegas properties and four in Northern Nevada were affected by the closure order.
Revenue fell 13.6 percent to $1.828 billion for the first quarter, which ended March 31.
The company’s net income was $189 million, or 28 cents a share, primarily because of a year-over-year change in the fair value of the derivative liability related to the conversion option of the company’s 5 percent convertible senior notes that mature in 2024.
A year earlier, the company showed a quarterly loss of $217 million, or 32 cents a share. Caesars failed to meet analysts’ expectations for revenue or earnings.
Carlo Santarelli, an analyst with the New York office of Deutsche Bank, said he expects company stock to rise, but he noted there could be other circumstances that affect shareholder value.
Santarelli listed downside risks as additional or elongated closures stemming from concerns around COVID-19, an unforeseen circumstance that jeopardizes the closing of the Eldorado transaction, an inability for managers to execute on cost-cutting measures, and greater-than-expected impacts from cannibalization or new competition.
The Las Vegas market had the company’s worst performance, with net revenue down 13.9 percent to $822 million. Net income from Las Vegas operations for the quarter was down 61.9 percent to $86 million.
In a release preceding the company’s first-quarter earnings call with investors, the company said nongaming offerings, including entertainment, restaurants and bars, would likely be reopened on a phased basis with limited capacity. Spaces where guests or employees queue, including check-in, elevator lobbies, taxi lines, employee break rooms and cafeterias, will be clearly marked for social distancing.
“We are implementing new protocols focused on the well-being of our team members, guests and communities to create environments with high standards of sanitization and physical distancing practices,” Caesars CEO Tony Rodio said. “We are working closely with public health authorities, gaming regulators and infectious disease specialists to design our plan.”
The health and safety plan includes enhanced cleaning and sanitization of public spaces and guest rooms using disinfectants and guidelines intended to limit the spread of the virus, recommended by the Centers for Disease Control and Prevention. Employees will be trained on the new procedures and policies, and the company is instructing them to wash their hands for at least 20 seconds more frequently throughout their shifts.
Signage throughout the properties will strongly encourage guests to do the same, and hand sanitizer also will be available throughout Caesars’ properties.
Caesars shares, traded on the Nasdaq exchange, closed down 0.3 percent, or 3 cents, to $9.67 a share in volume about half the average. After hours, the issue was rebounding and was up 2.3 percent, or 22 cents, to end at $9.89 a share.
Caesars Entertainment Corp.
First-quarter revenue and earnings for Las Vegas-based Caesars Entertainment Corp., operators of Caesars Palace, Flamingo, Harrah’s and The Linq Hotel, among other Strip properties. (Nasdaq: CZR)
1Q 2020: $1.828 billion
1Q 2019: $2.115 billion
1Q 2020: $189 million
1Q 2019: ($217 million)
Earnings/(Loss) per share
1Q 2020: 28 cents
1Q 2019: (32 cents)