Boyd rolling to record earnings as gambling industry rebounds

David Strow

Friday, March 22, 2002 | 11:14 a.m.

Boyd Gaming Corp. stock traded at a 52-week high this morning, after the Las Vegas-based casino operator announced Thursday it would beat analyst expectations for the second straight quarter.

And some of the company's unexpected strength came from its Las Vegas properties, Boyd said.

In an earnings pre-announcement, Boyd said it expected to report earnings before preopening expenses of 27 cents to 30 cents per share for the quarter ending March 31. Wall Street had been expecting 18 cents per share; the company earned 10 cents per share in the year-ago quarter.

Cash flow will come in between $67 million and $70 million for the quarter, the company said. That will be up 22 percent to 27 percent over the year-ago quarter. Both cash flow and earnings per share will represent quarterly records for the company.

It was the second consecutive quarter that came in ahead of expectations for Boyd; in the quarter ending Dec. 31, Boyd posted earnings before one-time charges of 15 cents per share, when analysts had expected only 4 cents per share.

Boyd's stock rose $1.50 to $13.50 this morning.

Earnings increases were recorded at the company's three downtown Las Vegas casinos, Boyd said, as well as Sam's Town on the Boulder Strip. Earnings were also boosted by Delta Downs, a 1,500-slot casino on the Louisiana-Texas border, which opened in mid-February.

"The early results at Delta Downs are exceeding the company's original expectations for the property," Boyd said.

Also posting increases during the quarter were the Blue Chip casino in Indiana, Par-A-Dice in Illinois, and Sam's Town in Tunica, Miss., the company said.

Boyd provided no additional details or comment on the quarter in its statement.

Though results before one-time charges will be ahead of expectations, several factors will reduce the company's final earnings number, Boyd said.

One will be pre-opening expenses from the Borgata in Atlantic City and Delta Downs; Boyd said these expenses will reduce earnings by 4 cents to 6 cents per share.

Earnings could also be reduced by a write-down of the value of certain company assets, a move mandated by changes in national accounting practices. Boyd said it is currently reviewing its asset balances, but the company has yet to determine if a write-down will be necessary.

The bullish report came a day after Station Casinos Inc. said it expected to earn 16 cents to 18 cents per share during the March quarter, ahead of expectations of 10 cents per share. Station cited technology initiatives, a recovering Las Vegas market and cost-cutting measures as reasons behind its strong quarter.

Combined, the strong business at Boyd and Station indicates the nation's gambling industry is recovering quickly from the Sept. 11 slowdown.