Caesars Q1 Results Miss Estimates as Regional Casinos, Sports Betting Lag
Posted on: April 30, 2024, 04:02h.
Last updated on: May 1, 2024, 09:54h.
Shares of Caesars Entertainment (NASDAQ: CZR) slumped during Tuesday’s after-hours session, extending declines following a 4.7% drop during normal trading hours after the casino operator posted first-quarter results that badly missed Wall Street forecasts.
![Caesars Digital](https://www.casino.org/news/wp-content/uploads/2023/01/CP-1-858x483.jpg)
The Harrah’s operator said it lost 73 cents per share on revenue of $2.74 billion in the first three months of the year. Analysts expected a loss of eight cents on sales of $2.83 billion. While the gaming company mentioned unfavorable outcomes on the Super Bowl and the NCAA Tournament among the reasons why the first-quarter numbers missed forecasts, analysts and investors might apply scrutiny to Caesars’ Las Vegas and regional casino results.
On the Strip, where it’s the second-largest operator, Caesars revenue declined to $1.03 billion in the March quarter from $1.11 billion a year earlier. The gaming company said adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) at its Sin City venues declined to $440 million from $533 million a year earlier.
That could heighten concerns that activity is slowing down on the Strip following a multiyear run of pent-up demand sparked by coronavirus shutdowns.
Caesars Regional Woes Not Surprising
Caesars said its regional casinos posted first-quarter adjusted EBITDA of $443 million on revenue of $1.37 billion, down from $448 million and $1.39 billion a year earlier.
The tepid results from the regional side of Caesars aren’t surprising because multiple operators have flagged softness at such venues due to bad weather in January that hampered visitation to gaming venues in Reno/Tahoe and the Midwest. Additionally, there are mounting signs of lower-tier bettors reducing spending at gaming venues in the South.
There have been signs that high interest, sticky inflation, and other macroeconomic headwinds are weighing on some gaming venues in the Midwest and the South. Likewise, six of the nine casinos in Atlantic City, NJ experienced profit declines last year as more locals embraced iGaming.
“Moving past the first quarter headwinds, we remain optimistic toward improved operating results throughout the balance of the year,” said CEO Tom Reeg in a statement.
Modest Progress on Debt Reduction
Entering this year, analysts and investors wanted to see more evidence of Caesars trimming its debt burden — one of the industry’s largest. There were incremental signs of that progress in the first quarter. As of March 31, the Horseshoe operator had $12.436 billion in outstanding liabilities compared to $12.439 billion at the end of 2023.
At the end of the March quarter, Caesars had cash and cash equivalents of $726 million, a figure that doesn’t include $139 million in restricted cash.
“Excluding joint venture capex, we estimate 2024 cash capex spend of $800 million. We anticipate using free cash flows to continue to reduce debt in 2024,” said CFO Bret Yunker in the press release.
Related News Articles
Caesars Stock Could Be a Double in the Making
Boyd Gaming Unlikely to Monetize Las Vegas Real Estate Holdings
Boyd Gaming Slides After Earnings Miss, Analysts Cut Price Targets
Caesars Continues Paring Debt, Digital Unit Notches Profit
Most Popular
VEGAS MYTHS RE-BUSTED: The Strip’s Naked City Was Named for Sunbathing Showgirls
Bally’s Sets Date for Tropicana Las Vegas Implosion & Party
LOST VEGAS: The Frank Rosenthal Show
Wynn Las Vegas Strikes $130M DOJ Settlement, Largest Fine Ever for a US Casino
Most Commented
-
VEGAS MYTHS RE-BUSTED: You Don’t Have to Pay Resort Fees
August 2, 2024 — 16 Comments— -
VEGAS MYTHS RE-BUSTED: Elvis Was a Straight-Up Racist
August 9, 2024 — 11 Comments— -
ANTI-SOCIAL BEHAVIOR: Vegas Casino Buffet Stunt in Poor Taste Goes Viral
August 16, 2024 — 7 Comments—
No comments yet