A Reno-based company that will enter Southern Nevada’s casino market later this year delivered a profitable first quarter that failed to meet analysts’ expectations.
Eldorado Resorts Inc. struggled in its core downtown Reno market due to bad weather that dampened two of the company’s usually strong March weekends.
The company reported net income of $20.8 million, 27 cents a share, on revenue of $440.2 million for the quarter that ended March 31. A survey of eight Wall Street analysts on average expected the company to hit 38 cents a share and revenue of $446.1 million.
Eldorado has quietly built itself into a regional gaming powerhouse and is expected to enter the Southern Nevada market in late 2018 with its acquisition of the eight-property Tropicana Entertainment group portfolio that includes the Tropicana Laughlin.
The group, which is being acquired for $1.85 billion from Tropicana Entertainment, an Icahn Enterprises subsidiary, doesn’t include the Tropicana resort on the Las Vegas Strip, which is owned by Penn National Gaming.
Once the transaction — which also includes a resort in South Lake Tahoe — is completed, Eldorado would have about 26,800 slot machines and video lottery terminals similar to slots, more than 800 table games and 12,500 hotel rooms. It will allow the company to enter markets in Indiana and New Jersey and add to holdings in Louisiana, Missouri and Mississippi. Eldorado already has commercial holdings or tribal management contracts at casinos in Colorado, Florida, Iowa, Ohio, Pennsylvania, and West Virginia.
Under terms of the deal, Icahn’s Gaming and Leisure Properties will pay $1.21 billion, excluding taxes and expenses, for substantially all of Tropicana’s real estate and enter into a master lease with Eldorado for the acquired real estate. Eldorado will fund the remaining $640 million of cash consideration payable in the acquisition.
Eldorado’s stock closed up 6.2 percent, $2.50 a share, to $42.50 a share on heavy trading volume Friday. The price was flirting with the company’s 52-week high price of $43.70 earlier in the day.
Eldorado Resorts Inc.
First-quarter revenue and earnings for Reno-based Eldorado Resorts Inc., which is entering the Southern Nevada market with a property in Laughlin. (Nasdaq: ERI).
2018: $440.2 million
2017: $202.4 million
Adjusted cash flow
2018: $103.5 million
2017: $33.3 million
2018: $20.8 million
Earnings per share
2018: 27 cents
2017: 2 cents