Boyd Gaming earnings jump

Thursday, Oct. 21, 1999 | 11:43 a.m.

Boyd Gaming Corp. of Las Vegas reported a 70 percent jump in third-quarter per-share earnings Wednesday, as lower interest expenses and a stellar performance by the company's downtown Las Vegas properties offset lower results at its Strip and Boulder Highway hotel-casinos.

Boyd posted net income of $10.3 million, or 17 cents a share, on revenue of $239.5 million in the three months ended Sept. 30. In the year-earlier quarter, Boyd had net of $5.9 million, or 10 cents a share, on revenue of $234.7 million.

For the first nine months of 1999, Boyd's net income of $28.9 million, or 47 cents a share, is sharply higher than the $19.3 million, or 31 cents a share, posted in the year-ago period. Revenue is off slightly, to $724.7 million from $730.1 million.

Boyd said the third-quarter gains were driven by a 60 percent increase in operating cash flow from its three downtown Las Vegas casinos, a 43 percent rise in cash flow at its Par-A-Dice casino in Illinois and a 10.3 percent drop in interest expense. Boyd has paid off $61 million of debt through the first nine months of the year.

Management fees from the Silver Star hotel-casino in Philadelphia, Miss., were up 38 percent, Boyd said. The company announced Wednesday it agreed to an early termination of its management agreement with the Mississippi Band of Choctaw Indians as of Jan. 31, 2000, and will receive a one-time $72 million payment from the tribe for the agreement. Boyd will use proceeds to cut debt.

The Stardust on the Las Vegas Strip posted drops in both revenue and cash flow during the quarter due to increased competition and disruptions from a renovation project, Boyd said. Construction disruptions also hurt Sam's Town on the Boulder Strip, cutting cash flow and revenue there slightly.

Boyd's California, Fremont and Main Street Station hotel-casinos in downtown Las Vegas showed gains in cash flow, operating income margins and hotel occupancy for the third quarter.

Noting the company's debt reduction and cash-flow growth at most of its properties, Boyd Chairman William S. Boyd said the company is "positioned well for the fourth quarter with the pending acquisition of the Blue Chip riverboat casino in Michigan City, Ind., and the resumption of more normal business levels at the Stardust as its renovation program winds down."

Boyd is also developing the Borgata, a $750 million resort in Atlantic City's Marina District, in a joint venture with Mirage Resorts Inc.

Boyd Gaming stock closed at $7.0625 a share, up 68.75 cents or 10.8 percent, in Wednesday trading.