Las Vegas-based Golden Entertainment Inc. failed to meet analysts’ expectations but scored record revenue and cash flow results in its first quarter, company officials reported Wednesday.
As a result of the company’s October acquisition of American Casino & Entertainment’s Stratosphere, Aquarius and two Arizona Charlies’ properties, revenue was up 102.9 percent, to $214.8 million, and adjusted cash flow was up 238.2 percent, to $45.9 million, from the first quarter of 2017.
The quarter, which ended March 31, was the first complete period with the four new properties under Golden ownership.
First-quarter results were driven by the company’s Southern Nevada holdings, which Golden Chairman and CEO Blake Sartini said are operating in one of the nation’s most lucrative gaming markets. The Southern Nevada successes compensated for a sluggish first quarter at the company’s Rocky Gap Casino Resort in Maryland, which endured harsh winter weather.
“Throughout the first quarter, we made progress against all of our 2018 strategic priorities,” Sartini told investors in a Wednesday conference call. “We continued the expansion of our Las Vegas branded tavern platform with the opening of two of the six planned new locations for 2018 and both new properties are on track to generate the attractive returns we have experienced from other recent tavern openings.”
Despite the performance, results didn’t meet the expectations of analysts who, on average, had projected revenue of $217.2 million and earnings per share of 26 cents compared with the 13 cents reported.
“By the end of 2018, we expect to have completed the renovation of 317 rooms at the Stratosphere as well as the installation of state-of-the-art exterior digital signage and lighting,” Sartini said of the company’s current top priority. “Further, we intend to add a unique gastro-brewery to the property that leverages our market-leading tavern experience while featuring Golden Entertainment’s signature branded craft beers.”
Sartini said the new brewery would be connected to a new race and sports book.
“Our continued investment will establish Stratosphere as a preferred destination for Las Vegas visitors and locals alike and we remain confident that our renovations will generate an attractive return on capital,” Sartini said.
Golden also is working with Konami Gaming Inc. to develop a casino floor management system that will support a new branded loyalty card that customers will be able to use at all company properties.
Golden shares closed up a penny, less than 1 percent, to $27.61 a share, on average daily trading volume. After hours, units climbed another 59 cents, 2.1 percent, to $28.20 a share.
Golden Entertainment Inc.
First-quarter revenue and earnings for Las Vegas-based Golden Entertainment Inc. (Nasdaq: GDEN).
2018: $214.8 million
2017: $105.9 million
Adjusted cash flow
2018: $45.9 million
2017: $13.6 million
2018: $3.9 million
2017: $5.3 million
Earnings per share
2018: 13 cents
2017: 23 cents