Boyd earnings tumble

Thursday, April 19, 2001 | 11:11 a.m.

Boyd Gaming Corp. of Las Vegas reported a dramatic decrease in earnings, but still exceeded analysts' expectations as its two Sam's Town properties continued to struggle because of construction disruptions.

Las Vegas-based Boyd reported net income of $6.1 million, 10 cents a share, compared with $57.1 million, 92 cents a share, for the same quarter a year earlier.

Revenue for the quarter ending March 31 was $280.4 million compared with $347.4 million in the first quarter of 2000. Last year's revenue included a one-time $71 million fee for the termination of a contract with the Mississippi Band of the Choctaw Indians to manage the land-based Silver Star Casino near Philadelphia, Miss.

Analysts surveyed by Thomson Financial/First Call anticipated earnings of 7 cents a share for the quarter.

Boyd officials said Wednesday that both the Las Vegas and Tunica, Miss., Sam's Town properties had lower revenues following expansion and renovation projects that disrupted operations. Capital spending for the first quarter consisted of the final payments on the two Sam's Town projects.

Sam's Town Las Vegas recorded revenue of $38 million for the quarter compared with $37.7 million for the same period a year ago. Cash flow was $5.2 million compared with $8.7 million last year. Sam's Town Tunica had first-quarter revenue of $27.7 million and cash flow of $1 million compared with revenue of $25.2 million and cash flow of $3 million for the quarter last year.

But despite the problems, Boyd's other casinos had good performances for the quarter. The Stardust hotel-casino on the Strip had quarterly revenue of $38.9 million and cash flow of $5 million compared with revenue of $38.5 million and cash flow of $4.8 million for the previous year. It was the property's highest quarterly cash flow figure in two years.

The Eldorado and Jokers Wild properties in Henderson reported combined revenues of $9.1 million and combined cash flow of $1.9 million in the first quarter, both the same as last year.

And the company's downtown Las Vegas properties, which include Main Street Station, California and Fremont hotel-casinos, recorded revenues of $56.3 million in the quarter, compared with $54.6 million a year ago, with cash flow of $10.2 million compared with $10.1 million for the same periods. Downtown revenues also include income from Vacations Hawaii, a Honolulu travel agency that packages tours to the Boyd properties.

Boyd's properties outside Nevada also had modest increases in revenues and cash flow, with only the Michigan City, Ind.-based Blue Chip showing a quarterly decrease in revenues from the previous year.

But Boyd officials are most excited about an out-of-state project -- the Borgata hotel-casino project in Atlantic City, N.J. -- that will open in summer 2003.

Don Snyder, president of Boyd Gaming, called the $1 billion Borgata, a 40-story, 2,010-room resort with a 120,000-square-foot casino as "the most anticipated growth opportunity in our industry."

Boyd is building the resort in the city's Marina District in a partnership with MGM MIRAGE.

Snyder said the company is taking special efforts to keep the property, the first new resort in Atlantic City in 13 years, on schedule and on budget.

Snyder also told analysts of Boyd's plans to get a bigger cut of the convention business. The company is exploring plans to build a pavilion off the west end of the Stardust hotel-casino ballroom area to accommodate large meetings and groups.

The company also said it is looking into the possibility of adding charges to room rates to offset rising utility costs.