ITT expects earnings to dive

Tuesday, Sept. 10, 1996 | 11:59 a.m.

ITT Corp. indicated high-rolling baccarat players beat Caesars Palace like a drum last month, slashing third-quarter earnings from an expected 81 cents a share to about 56 cents, the same as in the 1995 quarter.

The company also said it "has no reason to believe these third-quarter gaming shortfalls will be offset by improved performance" for the rest of the year.

ITT shares fell as much as 15 percent on the New York Stock Exchange this morning. In midmorning trading, the issue fell $8 to $48 and was at $47.50 at one point.

In announcing that earnings would be "significantly impacted by negative results in the company's gaming segment," ITT said Caesars had a "negative hold percentage" in baccarat in August.

A Caesars spokesman declined to comment, but an ITT executive said baccarat revenue from Caesars and the Desert Inn would be about $54 million for the quarter, down from $90 million last year.

"Construction delays in the North Casino at Caesars Palace as well as continued construction-related disruption at the Desert Inn will also have a negative impact on the quarter," ITT said.

"In addition, due to increased competition in the Tunica, Miss., market, ITT's performance there is expected to be substantially below the 1995 third quarter."

As a result, ITT said, it expects to report earnings of about $67 million, or 56 cents a share. Analysts expected the company to earn about $96 million, or 81 cents a share, in the third quarter and $110 million, or 93 cents a share for the fourth period.

ITT said its hotel segment is expected to perform well in the quarter, though not enough to offset the gaming adversities. It didn't elaborate on why it expects no improvement for the fourth quarter.