Fortunes improving at Las Vegas Tropicana

Wednesday, July 19, 2000 | 11:04 a.m.

SUN STAFF AND WIRE REPORTS

Aztar Corp. of Phoenix, owner of the Tropicana hotel-casinos in Las Vegas and Atlantic City, today reported second-quarter operating cash flow of $52 million, up 23 percent from the year-ago quarter.

And Harrah's Entertainment Inc. of Las Vegas, the third-largest U.S. casino company, today said second-quarter profit fell 1.5 percent even while revenue rose 17 percent as it lost to gamblers at its Rio hotel-casino in Las Vegas.

At Aztar, earnings per share were 34 cents before a non-recurring tax benefit. Earnings were 4 cents in the 1999 quarter after a 9-cent charge or debt redemption. With the one-time gain of $7.5 million, per-share earnings were 51 cents in the 2000 quarter.

Revenues of $221 million increased 7 percent.

"We are pleased to report the highest quarterly levels of revenues, income and operating cash flow in our company's history," said Paul Rubeli, Aztar chairman and chief executive. "Our significant free cash flow enabled us to continue to aggressively repurchase our stock and to further strengthen our balance sheet. Our company has never been stronger and our outlook has never been better. We will continue to repurchase our stock."

The Tropicana Casino and Resort in Atlantic City reported record second-quarter operating cash flow of $30.7 million, up 19 percent.

The Tropicana Resort and Casino in Las Vegas reported operating cash flow of $8.7 million, up more than 80 percent as room occupancy was 99 percent and cash room revenue increased 18 percent. At Harrah's, profit from operations fell to $47.2 million, or 40 cents a share, from $47.9 million, or 37 cents, in the year-ago quarter. The profit was less than the 44-cent average estimate of analysts polled by First Call/Thomson Financial. Revenue rose to $879.2 million from $751.1 million.

The company is having trouble getting high rollers to stay at the Rio amid competition from newer gambling resorts, analysts and investors have said. Las Vegas-based Harrah's said it won 8.4 percent of the money bet at table games in the Rio, compared to an average hold percentage of 20.5 the past three years.

Harrah's also had higher interest expense and amortization after its acquisition of Players International Inc. in March and borrowing to buy back 9.4 million of its shares this year.

In the quarter, charges of $716,000, or 1 cent, led to net income of $46.5 million, or 39 cents. In the year-earlier quarter, charges of $7.38 million, or 6 cents a share, resulted in net income of $40.5 million, or 31 cents.