Aztar stock off despite strong earnings

Wednesday, April 24, 2002 | 11:12 a.m.

The owner of the Las Vegas Strip's Tropicana hotel-casino was able to post a 21 percent increase in net income for its first quarter, driven by a huge quarter in Atlantic City.

Aztar Corp. of Phoenix today reported net income of $13.8 million, or 35 cents per share, up from net income of $11.4 million, or 28 cents per share, in the year-ago quarter. Aztar beat analyst expectations for the quarter by 5 cents per share.

Still, investors may have been looking for more from Aztar; its stock fell 64 cents to $24.81 in morning trading.

Revenues fell 1 percent to $206 million, but cash flow increased 5 percent to $48.9 million. Cost control played a key factor, as the company's cash flow margin rose from 22.4 percent to 23.7 percent. The company said earnings per share, net income and cash flow were all first-quarter records.

This year's first quarter ran from Jan. 4 to April 4 -- so it did not include the New Year's weekend, as the comparable quarter did last year. Had New Year's been included in this year's first quarter, Aztar estimated its cash flow would have risen an additional $2.5 million, and that the company would have earned an additional 4 cents per share.

The Tropicana Atlantic City carried the quarter for Aztar, as cash flow at the property rose 21 percent to $28.3 million

The Tropicana on the Strip struggled during the quarter. Cash flow at the property fell 25 percent to $5.7 million, as both occupancy and room rates fell over the year-ago quarter. The Tropicana would have been down year-over-year, even with the addition of the New Year's weekend, the company said.

At the Ramada Express in Laughlin, cash flow declined 9 percent to $7.5 million.

Aztar's other casino properties in the midwest reported flat performances, though Aztar said results would have been up at both had the New Year's weekend been included. At its casino in Evansville, Ind., cash flow rose 1 percent to $9.6 million. At Caruthersville, Mo., cash flow was $1.3 million, unchanged from last year.

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