Boyd’s profit doubles

Tuesday, April 26, 2005 | 10:54 a.m.

First-quarter profit more than doubled at Boyd Gaming Corp., boosted by the company's 2004 acquisition of Coast Casinos as well as strong growth across the company's other properties nationwide.

"This is the third quarter in a row that we've more than doubled earnings per share," Boyd Gaming Chief Financial Officer Ellis Landau said. "We hope to have one more double in us before we cycle through one anniversary of the merger with Coast."

The company accomplished the earnings growth with 23 million more shares in the first quarter compared with the year ago quarter, Landau said.

Boyd reported a profit of $40.1 million or 45 cents per share compared with $13.5 million or 20 cents in the prior year's quarter. The company beat analysts' expectations by 12 cents per share.

In early afternoon trading today, Boyd shares were trading at $56.20, up 9 percent from the previous day's closing price.

Also Monday executives said they were still planning the eventual redevelopment of the company's aging Stardust resort.

President Keith Smith said Boyd began research on the 63-acre site a few months ago but that "it will take much of the remainder of '05 to determine the proper development for this site."

Smith also said the company is making "great progress" on its South Coast resort, which is expected to be complete around the first of next year. The property will open with about 660 rooms but is master planned for up to 2,000 rooms, he said.

The company also will look at strategic acquisitions to fuel growth but isn't "reliant on acquisitions or new jurisdictions for our growth," he said.

The Coast Casinos chain of locals casinos in Las Vegas benefited from the strength of the overall Las Vegas market rather than any operational changes, he said.

"They were very well run when we acquired them and they continue to be well run," he said.

Revenue minus promotional costs rose 72 percent to $566.9 million.

Earnings before interest, taxes, depreciation and amortization -- a key profit indicator -- more than doubled to $170.4 million, with all of the company's six geographic units reporting gains from last year.

At the company's Boulder Strip casinos in Las Vegas, that indicator rose 13 percent to $15.9 million. The company's Stardust casino rose 30 percent to $7.1 million. Downtown casinos rose 13 percent to $11.4 million. All told, the company's Nevada properties broke the $100 million mark for the first time, more than tripling from the first quarter of 2004.

The Coast Casinos chain, acquired in July 2004, reported $68.2 million in earnings before certain costs.

"The Las Vegas locals market remains one of the best places to operate in our business," Chief Executive Bill Boyd said in a statement.

The company's half-owned Borgata resort in Atlantic City, which will expand its amenities and hotel rooms over the next couple of years, continues to "dominate the market" by reaping more gambling revenue per game than the competition, executives said.

Revenue at the resort grew 18 percent to $172 million and earnings before interest, taxes and other costs grew 42 percent to $56.9 million.

"It doesn't appear that any other property can touch it," Landau said.

Landau said the company expects second-quarter earnings per share from 53 to 55 cents, ahead of analysts' estimates. Earnings before interest, taxes, depreciation and amortization should be in the range of $155 million to $165 million, he said.