Analyst sees higher profits at Harrah’s, MGM

Wednesday, Aug. 25, 1999 | 11:46 a.m.

BancBoston Robertson Stephens senior gaming analyst Harry Curtis raised his estimates for the earnings of Harrah's Entertainment Inc. and MGM Grand Inc. Tuesday.

Curtis boosted his projections for MGM Grand's third-quarter net to 50 cents a share from 44 cents and for Harrah's year 2000 per-share net to $1.85 from $1.80. His estimates exceed the consensus projections of analysts covering the gaming industry.

"We believe fourth-quarter room-rate trends in Las Vegas are accelerating in much the same way they did in the first quarter," he said. "This fall, strong tourist demand partially driven by the opening of Paris-Las Vegas in September will be supplemented by strong convention demand, which should give Las Vegas casinos pricing power."

Curtis also suggested the California Supreme Court's recent ruling limiting the spread of legal gaming at Indian casinos in that state should give Las Vegas casinos "a 15-month reprieve to orchestrate their strategy."

Tribal leaders are collecting voters' signatures for a new initiative that would seek to amend California's constitution and allow Nevada-style casino games and slots to be offered to customers.

Curtis said he's boosted his MGM earnings projections due to the strong outlook for Las Vegas casinos, while the higher Harrah's estimates take into account the announced acquisition of Players International, which is supposed to occur in the fourth quarter of 1999.