The Associated Press

Fri, Aug 1, 2008 (10:18 a.m.)

Boyd Gaming said Friday it will delay construction of its $4.8 billion Echelon project on the Las Vegas Strip until economic conditions improve.

The Las Vegas-based casino company said earnings for its second quarter fell 6.3 percent on sluggish economic conditions that reduced revenue, especially in the Midwest and South.

The company said net income fell in April, May and June to $21.7 million, or 25 cents per share, from $22.1 million, or 25 cents per share, in the second quarter of 2007. The quarterly results beat analysts' consensus estimates.

Boyd Gaming broke ground on Echelon last June on the former site of the Stardust hotel-casino, which it imploded in March 2007. The 87-acre Echelon resort had been expected to open in the second half of 2010.

"We expect to resume construction when credit market conditions and the overall outlook for the economy improve," the company said in a statement released with its second-quarter earnings report.

The company said certain pretax adjustments, mostly from pre-opening expenses for the company's Echelon and The Water Club projects, reduced income from continuing operations by $7.6 million. Excluding those and other items, profit from continuing operations was $26.4 million, or 30 cents per share, compared with $39.9 million, or 45 cents per share, in the year-ago period.

Net revenue dipped 9.9 percent to $460.8 million from $511.4 million.

Analysts polled by Thomson Financial, on average, forecast earnings of 27 cents per share on revenue of $462.9 million. Analyst estimates typically exclude special items.

Revenue was about flat at the Borgata Hotel Casino & Spa in Atlantic City, N.J., at $205.1 million compared with $202.1 million. Boyd Gaming owns the Borgata with MGM Mirage Inc.

Revenue from Boyd Gaming's Midwest and South operations dropped 15 percent, owing to new competition, weak economic conditions, and disruption from construction.

Boyd also suspended its quarterly dividend program, which it believed was not adequately valued in its share price at recent trading levels.

Boyd also announced a $100 million expansion to its stock buyback program.

Company shares climbed $1.97, or 19.75 percent, to $11.95 in morning trading. The stock has ranged from $7.90 to $45.40 over the past year.

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On the Net:

Boyd Gaming Corp., http://www.boydgaming.com