Improved results from Tropicana lift Aztar earnings

Wednesday, Jan. 31, 2001 | 10:31 a.m.

Aztar Corp. of Phoenix today reported a 20 percent increase in earnings per share, as its Tropicana hotel-casino on the Las Vegas Strip posted much improved results for the quarter ending Dec. 28.

Aztar reported earnings of 12 cents per share, beating analyst expectations by 2 cents; however, most analysts had revised an earlier estimate of 14 cents per share down to 10 cents after a company earnings warning several weeks ago.

Company revenues were flat year-over-year, at $193.4 million. The company posted net income of $5.2 million, up from a net loss of $6.5 million in the year-ago quarter. The 1999 quarter included a one-time charge of $11.3 million.

At the Tropicana on the Strip, revenues increased 2 percent to $35.6 million, while cash flow shot up 43 percent to $6.3 million. The property recorded operating income of $1.9 million, compared to an operating loss of $700,000 a year ago. Aztar's Ramada Express in Laughlin did not fare as well, as revenues declined 5 percent to $21.7 million and cash flow sank 24 percent to $3.7 million.

"Seniors are an important customer segment at the Ramada Express, and we believe visitation patterns were altered in the fourth quarter by concerns, fostered during the election period, about Social Security, health care costs and energy prices," the company stated. However, it said the Ramada Express has returned to normal business levels in January.

Tropicana Atlantic City reported revenues of $107.3 million, up 1.4 percent, and cash flow of $23 million, up 1 percent. But the company's properties in Indiana and Missouri were impacted by poor weather in the quarter -- cash flow was off 13 percent in Evansville, Ind., to $6.1 million, while Aztar's Caruthersville, Mo., casino reported cash flow fell 14 percent to $600,000.

Meanwhile, Lakes Gaming Inc. of Minneapolis reported a loss for the quarter ending Dec. 31, the result of heavy investment write-offs.

The company reported a net loss of $104,000, or 1 cent per share, down from net earnings of $4.2 million, or 39 cents per share, in the year-ago quarter. Revenues declined 35 percent to $6.7 million, while earnings from operations declined 37 percent to $7.5 million.

Lakes said it wrote off its investments in three non-gaming ventures, including a consumer products concern and an Internet fantasy sports venture. These write-offs cost Lakes $3.3 million after taxes, or about 31 cents per share. Company earnings were reduced by an additional 8 cents per share from losses from unconsolidated affiliates. Lakes also said increases in marketing and employee costs at its casino in Louisiana caused a decrease in management fee income.