Riding a robust Southern Nevada economy, Las Vegas-based Red Rock Resorts, parent company of Station Casinos, on Tuesday reported a 13.4 percent increase in net revenue for the fourth quarter, beating analysts’ estimates.
The company, which realized its first full quarter of revenue from the recently acquired off-Strip Palms, reported earnings of $41.1 million, 37 cents a share, on revenue of $394.6 million for the quarter that ended Dec. 31.
Net income, including some attributable to noncontrolling interests from the fourth quarter of 2015, was $48.6 million, 54 cents a share, on revenue of $348 million.
A survey of 10 analysts had projected earnings of 35 cents a share and a survey of 11 analysts predicted revenue of $393.7 million for the quarter.
Marc Falcone, the company’s executive vice president, chief financial officer and treasurer, told investors in a conference call that Station is “benefiting from robust Strip fundamentals,” noting that while the company is locals-oriented, many of its customers are Strip employees enjoying the upbeat economy.
“Las Vegas is the best regional gaming market in the United States,” Falcone told investors, noting that Nevada is the second fastest-growing state in the nation and Las Vegas is the fourth fastest-growing metropolitan city.
While the nationwide gross domestic product is growing at a 2.5 percent clip, Nevada is growing at 2.8 percent, he said.
While the company’s revenue surpassed 2015’s fourth quarter total, expenses ate into Station’s profits with costs related to the $316 million Palms transaction and the startup of a $115 million expansion and upgrade project at Palace Station affecting earnings.
The Palace Station project and a slot-machine upgrade of 20,000 IGT slot machines citywide are expected to be completed by the end of the year.
Station also enhanced its Boarding Pass loyalty program with a system enabling customers to earn and spend on gaming and nongaming amenities in 2016.
Red Rock Resorts’ board of directors on March 1 declared a 10-cent-per-share dividend payable March 31 for shareholders of record on March 15.
On Wall Street, Red Rock shares closed down 34 cents a share, 1.5 percent, to $22.01, but the price recovered 39 cents, 1.7 percent, to $22.01 in after-hours trading on above-average volume.
Contact Richard N. Velotta at firstname.lastname@example.org or 702-477-3893. Follow @RickVelotta on Twitter.