Churchill Downs Inc. has record second quarter earnings

Churchill Downs Inc. had record net income of $50.3 million during the second quarter of 2013, the company announced late on Wednesday, as the company continues to reap gains from its leverage of the Kentucky Derby and Kentucky Oaks while benefiting from its acquisition of standalone casinos.

Net revenues in the quarter were also a record, at $283.8 million, up 5 percent over second-quarter revenues of $270.8 million last year. Operating expenses were flat, at $82.1 million in the quarter, according to the company’s financial statements.

Revenues from the company’s racing operations were down 2 percent in the quarter to $157.4 million, but expenses were down 6 percent, $90.2 million this year. Revenues from the company’s casino operations were up 30 percent, to $66.9 million, almost entirely because of the inclusion of revenues from a casino that Churchill bought in Mississippi in late 2012. Casino expenses were up 30 percent, the same rate of growth as revenues.

Gross operating profit in the quarter on racing operations, not including Churchill’s account-wagering operations, was $67.2 million, underlining the importance of Oaks and Derby Day. Gross operating profit on casino operations in the quarter was $17.3 million.

Churchill’s on-line operations, which includes twinspires.com and luckity.com, had revenues of $52.5 million in the quarter, down slightly from $52.7 million last year. In a release, Churchill said that business for twinspires.com was hurt during the quarter because of a temporary ban on account-wagering in Illinois, where Churchill owns Arlington Park.