Boyd Gaming Misses Estimates, Even Without Huge Impairment Charge

Casino Entrance
Casino Entrance

Boyd Gaming Corp. (NYSE: BYD) reported fourth-quarter and full-year 2012 results before markets opened this morning.

For the quarter the casino operator reported an adjusted earnings per share (EPS) loss of $0.31 and $625.8 million in revenues. In the same period a year ago, the company reported an EPS loss of $0.03 on revenue of $606.7 million. Fourth-quarter results also compare to the Thomson Reuters consensus estimates for an EPS loss of $0.13 and $635.37 million in revenue.

On a GAAP basis, Boyd posted a quarterly EPS loss of $10.24, compared with a GAAP net loss of $0.01 in the fourth quarter of 2011. The quarterly loss was mostly due to a $994 million impairment charge on the 87-acre site of Boyd's planned Echelon development in Las Vegas. The company also announced this morning that it has sold its Echelon site on the Las Vegas Strip to a Malaysian gambling group for $350 million in cash.

For the full year the company reported an adjusted EPS loss of $0.28 on revenues of $2.489 billion. The consensus estimates called for a full-year EPS loss of $0.11 on revenues of $2.5 billion.

The company's CEO said:

Our highest priority is strengthening our balance sheet. The sale of the Echelon site is another important step in the ongoing effort to improve our long-term financial position. While we remain committed to the Las Vegas market, we determined that developing a large-scale project on the Las Vegas Strip was not consistent with our current strategy.

Boyd was a bit coy about its current strategy, saying only that the company remains focused on its core business, integrating some recently acquired assets, and "finding new ways to drive revenue and EBITDA growth throughout the business." Funny thing is the company did not mention the recent approval of online gambling in both Nevada and New Jersey. Boyd has a stake in a joint venture to create online gaming software, and given the poor performance the company announced this morning, one might expect a little hype about how big online gaming could be.

The company offered no guidance, but the consensus estimate for the first quarter calls for EPS of $0.21 on revenues of $758.25 million. For the year, the consensus EPS estimate is $0.45 on revenues of $2.99 billion.

Shares are trading up more than 3% in the premarket this morning, at $6.67 in a 52-week range of $4.75 to $8.52. Thomson Reuters had a consensus analyst price target of around $6.20 before today's results were announced.

Filed under: 24/7 Wall St. Wire, Casinos, Earnings Tagged: BYD