Regional casino operator Pinnacle Entertainment posted a profit for the first quarter, surprising Wall Street, which had predicted a net loss after the company’s upheaval following a management shake-up and direction changes.
The Las Vegas-based company, which operates casinos in Nevada, Louisiana, Indiana, Missouri and Argentina, said Tuesday its earnings jumped to $36.7 million, or 60 cents per share, for the quarter ended March 31, compared with $931,000, or 2 cents per share, a year earlier.
Analysts surveyed by Thomson Reuters had expected a loss of 11 cents per share.
Quarterly revenue rose 3.2 percent to $267.4 million from $259.2 million.
Pinnacle said a substantial gain related to some property sales and an insurance claim settlement helped the company’s results.
The company also said its Lumiere Place resort in downtown St. Louis posted strong revenues and “record” adjusted cash flow.
Pinnacle said customers spent more money gambling and on hotel rooms. Consumers also spent a bit more on food and beverages, shopping and entertainment, a change since the recession which saw customers pull back.
During the quarter, Pinnacle scaled back on development plans in Lake Charles, La., following the company’s decision earlier this year to scrap a planned $2 billion hotel-casino project in Atlantic City.
Pinnacle also benefited from the opening of a new casino in suburban St. Louis.
New Pinnacle Chief Executive Officer Anthony Sanfilippo, who was hired last month, said the company was focusing on operating its existing properties rather than expansion.
“Pinnacle generated solid first-quarter operating results which reflect the initial benefits of our heightened focus on achieving operating efficiencies and exercising financial discipline throughout the company,” Sanfilippo said. “Our success with these strategies in the first quarter should provide an excellent foundation for further progress throughout the balance of the year.”
Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski said Pinnacle lowered promotional spending which positively impacted margins.
He said the results bode well for other regional casino operators that consumer spending is showing some signs of life.
“Cost cutting, exiting noncore markets and sound capital deployment make us believe (Pinnacle’s) management seems committed to improving shareholder value,” Wieczynski said.
Contact reporter Howard Stutz at email@example.com or 702-477-3871.