04/29/2004 11:00PM

Casinos continue to defy analysts


Some casino industry analysts had predicted that 2003 would be a flat year for gaming companies. Well, they were wrong in 2003 and after the first quarter of 2004, the analysts are still wrong.

First quarter earnings reports for some major casino companies were released this past week and the tone was the same. "A Simply Smashing Quarter" was the business headline in the Las Vegas Review-Journal.

One gaming company after another announced record earnings and here are some of the highlights.

Station Casinos announced first quarter adjusted earnings of 51 cents a share, an increase of 122 percent above last year's 23 cents a share on a comparable basis. Cash flow, which is a key measure of profitability, was up 42 percent from the first quarter of 2003.

With local additions to its portfolio and expanded tribal gaming pacts in California, Station is positioned for even more growth. Station's stock, which had been selling in the low $20 range early in 2003, has reached nearly $50 a share.

Caesars Entertainment reported first quarter net income was up 25 cents per diluted share, up 93 percent from 14 cents per share for the same period last year. Caesars Entertainment president Wally Barr said his company set records for net income, earnings per share, cash flow, and revenue.

Caesars Entertainment, formerly known as Park Place Entertainment, has strengthened its brand and has been a solid turnaround story since Barr took over leadership of the company. As part of its refocusing, it is selling the Las Vegas Hilton with the deal to be completed by June.

MGM Mirage saw its adjusted earnings per share skyrocket to a record 70 cents per share, up from 38 cents per share in the first quarter of 2003. The Bellagio and MGM Grand enjoyed their most profitable quarters in history to lead the way for the 12 casino properties under the MGM Mirage umbrella.

The only property to falter slightly was The Mirage, which completed its first full quarter without the Siegfried & Roy show. Siegfried & Roy were closed permanently Oct. 3 after Roy Horn was injured by a white tiger during an onstage performance.

And finally, the Las Vegas Sands, owner of The Venetian, posted the highest quarterly cash flow earnings for a single property in Las Vegas history of $103.9 million. The Venetian broke internal records across the board with huge increases in hotel revenue, up 49 percent; food and beverage, up 67 percent; casino revenue, up 29 percent; and table volume, up 17 percent.

Even with the addition of 1,000 more hotel rooms in the new Venezia Towers, revenue per room increased almost 10 percent to $235 from $217 per night.

Richard Eng is the turf editor for the Las Vegas Review-Journal and host of the Race Day Las Vegas Wrap Up radio show.