It seems frustratingly difficult to get an accurate grip on the current state of Las Vegas; some feel it’s bouncing back like never before, and some feel it will never be the same. Boyd Gaming has come out and said the company is more than happy with the first quarter of the year, and things only seem to be looking better with each passing day.
The $550.6 million in the quarter marks a 1.8 percent increase from where they were at least year. The $35.1 million in earnings is considerably better than the net loss of $6.2 million from a year ago as well. Adjusted earnings came in $14.2 million compared to a loss of $4.1 million in the same quarter last year.
Earnings too, rose a healthy amount. 31 cents per share, in fact, compared to a loss of 6 cents per share last year. Adjusted earnings saw 13 cents per share, compared to a 4 cent per share loss last year.
Downtown casinos for the company are on the rise, as the net revenue of $56.6 million is a rise of 1.6 percent from the same period last year. Revenue from Hawaiian customers was a huge source of business according to company, as lower fuel costs made travel much cheaper than before.
While the downtown properties did well, local market casinos did not. The net revenue of $150.3 million was down slightly from $151.4 million over the same quarter last year. The company cited a poor sports book hold from the Super Bowl and an “extensive roadway project” next to the Suncoast.
Keith Smith, president and CEO of Boyd Gaming, which owns the Borgata Hotel Casino & Spa, said in a recent earnings call that the closing of four casinos in Atlantic has stabilized the market.
And that’s allowed Boyd to boost its 2015 earnings target for the Borgata to $165 million from $160 million after a strong first quarter.
Boyd reported first-quarter net revenue for Borgata of $182.6 million, up 9 percent from $167.3 million in the same period a year ago. The Borgata—Atlantic City’s leading casino—saw operating profit nearly double to $37.8 million from $20.5 million.
Part of that increase, however, came from successful tax appeals for the property, but Smith also said the city’s casino market needed the casino closures. The Atlantic Club, Trump Plaza, Showboat and Revel casinos all closed in 2014.
“The right-sizing of the Atlantic City market over the last 12 months has helped stabilize the operating environment in Atlantic City,” Smith said. “With eight properties, Atlantic City appears to have reached a level of supply that is appropriate for demand and the remaining properties are generally seeing better results.”
Smith did not discuss the Borgata’s property-tax fight with Atlantic City, which owes Borgata $88.25 million from a 2014 settlement of earlier tax years. The casino is still fighting with the city to get that payment, including suing the city to block it from borrowing money in the bond market to repay a $40 million loan from the state, without paying Borgata as well.
Boyd officials said they would have a better handle on the casino’s tax situation in July or August.
Meanwhile, the casino has received a bump—if a small one—from online gambling in New Jersey. The Borgata and PartyPoker partnership is the leading online provider in the state, but other sites are growing as well.
“Our online business continued to perform well, generating a profit for the third consecutive quarter,” Smith said. “Borgata’s online gaming business contributed more than $4 million to the property’s EBITDA gain as last year’s $3 million loss swung to a profit of $1 million during the first quarter of this year.”
The casino saw a $1.1 million in the first quarter compared to a $3.2 million loss in 2014 which included “significant start-up marketing cost that were not repeated this year.”
The casino has also begun introducing more online satellites and promotions awarding players with entry fees to live poker events at the casino’s poker room in Atlantic City.
