February 17, 2015 - 3:14 pm
Station Casinos presented an upbeat outlook for the Las Vegas locals gaming market Tuesday, based on economic improvements, higher consumer confidence, and lower gasoline prices.
The company reported revenue and cash flow figures that were at levels not seen since 2008.
“It may finally appear we have reached that inflection point we have been discussing for several years,” Station Casinos Chief Financial Officer Marc Falcone said on a conference call with analysts.
The company said its revenue for the quarter that ended Dec. 31 was $333.7 million, an increase of 2.2 percent. Cash flow in the quarter increased 6.1 percent. For all of 2014, Station Casinos’ total revenue of $1.29 billion was a 2.8 percent increase while cash flow grew 9.1 percent.
The company, which operates 17 large and small casinos throughout the Las Vegas Valley, is not publicly traded but has $2.1 billion of publicly held long-term debt.
Station Casinos also manages Indian casinos in California and Michigan and received management fees of $13.6 million in the quarter and $47 million for the year.
Falcone told analysts the company’s Las Vegas properties experienced a 5.1 percent increase in gaming revenue during the quarter, the largest growth rate since the first quarter of 2012. In addition to a boost from the locals market, Station Casinos said its hotel revenue was up 13 percent, the largest increase in seven years.
Falcone, a former Wall Street analyst, cited several factors in the Las Vegas economy that is attributable to increased consumer confidence. Taxable retail sales were up 9 percent through November, Nevada outpaced the majority of the nation in job growth last year, while the average hourly wage increased.
Housing prices also increased for the third consecutive year.
“The majority of key economic indicators have shown signs of improvement for several years and we expect these improvements to continue in 2015,” Falcone said.
In December, Station Casinos saw its sixth consecutive month of increases in slot machine revenue from its Las Vegas casinos.
“We believe the strength in overall fourth quarter spending may be a sign that our guests now have more money to spend on gaming,” Falcone said.
Station Casinos has a $55 million investment plan for its flagship Red Rock Resort and Green Valley Ranch properties.
Most of the restaurant renovations at Red Rock and the property’s connection to the Downtown Summerlin development were completed before the end of the year. Falcone said the hotel-casino had its strongest-ever cash flow for the fourth quarter.
Renovations at Green Valley Ranch are expected to be completed this year.
Contact reporter Howard Stutz at email@example.com or 702-477-3871. Find on Twitter: @howardstutz.