Casinos: Boyd Gaming Swings Back to $8.4 Million Q1 Profit, Still Wants Station's Casinos

So Boyd reported earnings this morning. They went from a $0.16 per share, or $13.8 million total, loss in Q1 2009 to a $0.10 per share, or $8.4 million total, profit. So how did they do it? Apparently they've been cutting costs rather aggressively, as net revenue actually fell 8.4 percent to $398.4 million from $434.8 million in Q1 2009.

Still, Boyd stated in its report that there's good reason to be more bullish on Las Vegas these days.

Keith Smith, President and Chief Executive Officer of Boyd Gaming, commented on the quarter: "We continue to be encouraged by improving trends in our business, which clearly reflect the signs of an emerging recovery. Our Las Vegas Locals market reported the best year-over-year comparison in nearly two years, and business levels are returning to normal seasonal patterns in this region. Given the positive developments in our business, combined with continued improvement in the national economy, we expect to generate year-over-year growth during the second half of 2010."

Looking at the internals, it seems like the locals' casinos are starting to recover their footing. Boyd's locals' casinos' Q1 2010 EBITDA was off only 10.8% from Q1 2009, compared to Boyd's Downtown casinos' EBITDA dropping 37.3%. No wonder why Boyd isn't pursuing any more Downtown casinos, but is still aggressively going after Station Casinos.

During Tuesday’s conference call, Smith said Boyd is still aggressively pursuing the acquisition of Station Casinos’ assets.

In December, Boyd made an offer to purchase Station Casinos’ assets in an effort to expand its locals market. The offer was $2.45 billion for the company’s 18 casinos and casino-hotels in Southern Nevada.

“We welcome the opportunity to compete for Station [Casinos] assets so long as the process is competitive, open and fair and as long as the assets have not been devalued to a point where it no longer makes financial sense,” Smith said.

So the picture is becoming clearer now. Boyd seems to have found the "magic formula" of expense cuts and travel/gaming promotion to return its locals' casinos to profitability (thereby taking the entire company back to black), so it thinks it can make money off Station's casinos. But wait, can they negotiate a deal with the Greenspuns on GVR and Aliante? And can they run these and the other "OpCo" properties without Station's Boarding Pass (players' club program) feeding locals and non-Strip travelers into the casinos? Apparently so, or so Boyd execs think.

Casinos: Wynn Resorts Makes $0.22 Q1 PROFIT, Beats Wall Street Estimates, Shows Improving Vegas & Macau Numbers

This just in from The Wall Street Journal:

The performance shows the Las Vegas market is improving as Wynn's revenue there grew 9.3% and the operating loss narrowed. In the Chinese gambling enclave Macau, profit and revenue climbed 82% and 32%, respectively. [...]

For the latest quarter, Wynn reported a profit of $27 million, or 22 cents a share, compared with a year-earlier loss of $33.8 million, or 30 cents a share. The latest quarter included 4 cents of charges.

Net revenue climbed 23% to $908.9 million.

Analysts estimated earnings of 14 cents on revenue of $849.8 million, according to a poll by Thomson Reuters.

Operating margin rose to 12.6% from 3.7%.

Overall casino revenue, which provided three-quarters of the total, climbed 28%, while food and beverage revenue increased 2%. In Las Vegas, casino revenue grew 19% while non-casino revenue slid 1.4% as hotel revenue declined 8.8% and food and beverage revenue slipped 1%. The occupancy rate edged down to 89.4% from 89.5%.

And there's even more good news in the internals. The Las Vegas ADR was $203. Las Vegas REVPAR was $181. Table game win per unit per day was $6,459. Unfortunately, all of this wasn't enough to prevent a $34.5 million loss for Wynn Las Vegas (including Encore)...

But Macau's earnings more than offset it! Obviously, Wynn's formula for profit these days now includes a heavy dose of Macau action. Growth there is gangbusters, and it's becoming increasingly clear why they're so excited about building Wynn Cotai as early as next year.

So it was Macau that saved Wynn's day in the end... But Vegas is now starting to look better, and Wynn is looking all the better for it.

Taking a Look at MGM Mirage's Preliminary 2010 Q1 Earnings

So today, MGM Mirage gave us a sneak peek of what to expect when it releases its full Q1 earnings report in the next couple of weeks. Here's The Wall Street Journal's rundown.

MGM said it expects a 22-cent first-quarter loss, swinging from a 38-cent profit a year earlier, though both contained one-time items.

Excluding a large gain from extinguishing debt and a smaller impairment charge, the loss would have been 31 cents a share. Analysts, who typically exclude one-time items from their view, were expecting a 21-cent loss, according to a survey by Thomson Reuters.

The company also said revenue would likely be $1.46 billion, above the average analyst estimate for $1.43 billion. The first-quarter projection represents another year-on-year sales slide. Total casino revenue is expected to be approximately 5% lower than the prior year, an improvement from the fourth quarter's 11% drop.

MGM said that its revenue-per-available-room, a key lodging metric, on the Las Vegas Strip fell 8% from a year earlier, with occupancy of 85%. The tourist haven has struggled in the recession as gamblers either quit to save money or placed their bets at casinos closer to home, while corporations are avoiding taking business trips to such a flashy locale.

So MGM Mirage's early results look mixed compared to Wall Street expectations, but Wall Street is looking fairly negatively so far. MGM stock closed about 5.6% lower in after hours trading (though off its lows from about two hours ago), which means it will likely open much lower when the New York Stock Exchange (NYSE) reopens for trading tomorrow morning. What's all the commotion about?

As the analysts were saying on that CNBC clip I posted above, there's still concern over consumer spending... And apparently rightfully so, considering MGM's Las Vegas Strip REVPAR (revenue per available room) slid 8% to $94. However MGM's average room rates actually rose to $111 per night while occupancy remained stable at 85%, which was especially quite the feat considering Aria being a drag at only 63% occupancy.

And that's just it, CityCenter's first earnings report was a dud. MGM Mirage is expecting to report a $255 million operating loss on CityCenter in Q1 2010. However, it is still quite young and MGM is still expecting better results later in the year as summer tourist season approaches. And with overall Vegas tourism and gaming numbers improving in late 2009 and continuing this trend so far in 2010, there's certainly reason to hope.

So what should we take out of the early MGM Mirage numbers? It's still looking tough out here in Vegas, but things aren't looking so scary any more. And hopefully when the Las Vegas Sands, Harrah's Entertainment, and Wynn Resorts numbers come out, we'll get an even better picture of the overall financial health of The Strip.