Analyst trims estimate for Harrah’s Entertainment

Tuesday, Jan. 9, 2001 | 11:05 a.m.

Robertson Stephens gaming analyst Harry Curtis lowered earnings estimates for Harrah's Entertainment Inc. by 3 cents per share, saying the company "is likely to report a confusing fourth quarter" because of issues related to poor weather and asset writedowns.

Curtis estimates Harrah's will post 2000 earnings per share of $1.61, down from previous estimates of $1.64. The company could post a loss of 75 cents to $1.30 per share for the quarter ending Dec. 31, Curtis estimated, based on asset writedowns of $250 million to $350 million, a change in management fee income from New Orleans and poor weather in key markets. Two key Harrah's investments -- National Airlines and the holding company of Harrah's New Orleans -- declared Chapter 11 bankruptcy in recent weeks.

However, Curtis said he remains "comfortable" with his estimates of $2.10 per share in earnings in 2001, which is "not dependent on a strong economy." The elimination of losses from National and the New Orleans casino, combined with an expected doubling in cash flow at the Rio, should account for most of the 2001 gains, Curtis wrote.