Bally, Coast, IGT earnings jump

Gary Thompson

Friday, July 19, 1996 | 11:59 a.m.

Bally Entertainment Inc. and Coast Resorts Inc. reported record second-quarter earnings, while slot giant International Game Technology said net income jumped 37 percent for its third quarter.

Bally, in the midst of merging with Hilton Hotels Corp., said net income rose 77 percent to record levels due to earnings growth in Las Vegas, New Orleans and Mississippi.

"Perhaps more importantly," said Bally Chairman Arthur Goldberg, "in Atlantic City our properties' performance was consistent with their record results of 1995.

"It was this steady performance in Atlantic City, combined with growth in other markets, that enabled us to post the increases."

Per-share net rose a more modest 41 percent due to an 18.2-million-share increase in outstanding common stock. Bally also recorded a $600,000, or 1-cent-a-share, charge in the latest quarter due to debt retirement.

"New projects in Atlantic City and Las Vegas are moving ahead on schedule," Goldberg said, referring to plans to build a $500 million, Parisian-themed 2,900-room resort on the Strip and expansions at its two Atlantic City properties.

"We continue to believe these major markets provide the best opportunities for growth over the next few years."

Coast Resorts Chairman Michael Gaughan said the 82 percent jump in earnings before interest, taxes, depreciation and amortization were due to stronger gaming revenues at the Gold Coast and Barbary Coast.

Operating income for the company jumped 125 percent to $7.2 million in the 1996 second quarter from $3.2 million in the year-earlier period, due to cost-cutting measures and revenue growth from slot-equipment upgrades, he said.

But Coast Resorts expects EBITDA will grow more slowly for the rest of the year "as a result of having achieved a substantially higher base," the company said.

Coast Resorts expects to open its third Las Vegas property, a $173 million, 840-room hotel-casino named the Orleans, in December.

Reno-based slot maker IGT said results improved in the fiscal 1996 third quarter due to increased machine sales and improved play on progressive slot machines.

IGT sold 22,600 slot machines in the third quarter, a 25 percent increase from sales of 18,100 machines in the fiscal 1995 third period. The recently opened Monte Carlo hotel-casino in Las Vegas accounted for 2,000 of the total 6,900 slots sold in Nevada.

Other casino openings, such as Grand Casinos Tunica, Lady Luck Casino expansions and three new riverboat projects, benefited IGT, according to Tom Baker, president and chief operating officer.

Revenue from IGT's linked progressive gaming operations rose 16 percent, to $62.2 million, Baker said. New systems, increased play and a higher installed machine base in Louisiana and Indian markets spurred the growth.

IGT operates more than 9,000 progressive slots in nine jurisdictions.

Gross profit on product sales rose to 46 percent from 44 percent in the 1995 quarter. Gross profit on gaming operations rose to 53 percent from 50 percent in the respective quarters.

During the first nine months of fiscal 1996, IGT bought back 3.8 million shares of common stock for about $44.8 million, reducing the number outstanding to 126.7 million.