07/24/2013 9:20AM

Penn National misses projections, shows third quarter loss


Penn National Gaming Inc., the owner and operator of 28 casinos and racetracks, had a net loss of $12.2 million in the second quarter of 2013, a sharp decline from net income of $66.7 million in the second quarter last year and well off the projections the company had previously estimated for the quarter.

The results sent Penn National’s stock tumbling 7.4 percent on Tuesday, the day the results were released. In a statement accompanying the release, Penn chief executive officer Peter Carlino acknowledged that the company had not hit its targets for many of its casino properties, blaming competitors that had launched expensive promotions and Penn’s decision not to counter the tactics.

“I’ve never seen an industry so desperate to give away its bottom line as this industry,” Carlino said on a conference call on Tuesday after the market closed, referring to casino discounts. “They’re suicidal.”

Net revenues for the quarter were up 6.8 percent to $761.4 million, largely due to revenues from new properties that Penn opened in the past nine months. Total operating expenses during the quarter ballooned 22.2 percent, however, from $584.5 million to $714.5 million.

After two decades of explosive growth, the casino market has shown considerable weakness during the past 12 months, on top of a general slowing following the recession of 2008. Many analysts have suggested that increased competition among casinos has squeezed profit margins.

Penn’s Thoroughbred racetrack properties include Penn National in Grantville, Penn.; Zia Park in New Mexico; Beulah Park in Ohio; Sam Houston Race Park in Texas; and Charles Town Races in West Virginia.