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Isle of Capri suspends projects after posting quarterly loss

Second-quarter earnings for St. Louis-based Isle of Capri Casinos reflected the fortunes of regional casino operators.

The company, which operates primarily in the South and Midwest, posted a net loss of $13.5 million, or 43 cents per share, Tuesday for the quarter ended Oct. 26, compared with a loss of $24.6 million, or 80 cents per share, a year earlier. Analysts polled by Thomson Reuters had predicted a loss of 21 cents per share.

Revenues fell 8.9 percent to $254.1 million from $278.8 million.

In its earnings statement, Isle of Capri said it will not take on any new capital projects and suspended work on its Biloxi, Miss., expansion, partly due to current economic and capital market conditions.

“Despite the overall economic uncertainty that has had a profound impact on consumer spending across the country, I believe that our company has done an effective job of improving our operations while coping with the first overall declining gaming market that I have experienced in my 30-year career,” Isle of Capri Chief Executive Officer James Perry said in a statement.

The company operates 18 casinos in Mississippi, Iowa, Missouri, Colorado and Florida.

Shares of Isle of Capri Casinos fell to a more than 10-year low Tuesday after the company reported results. But the stock price climbed back during trading on the Nasdaq National Market. Isle of Capri closed at $3.53, up 80 cents, or 29.3 percent.

Oppenheimer gaming analyst David Katz said hurricanes that hit the Gulf Coast region in August and September slowed gaming activity in Louisiana and Mississippi. A smoking ban in Colorado hurt gaming revenues in that state.

“There is clear evidence of cost-cutting efforts in the quarter, which partially offset falling volume levels,” Katz said in a note to investors. “Nonetheless, liquidity remains the key issue which should be manageable.”

He said the company will benefit from a $95 million settlement the company reached with insurance carriers over damages incurred at its Biloxi casino from Hurricane Katrina in August 2005.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.

 

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