Aztar Profits
From Expansion
Aztar's profits rose 65% in
the second quarter as the casino operator reaped
the rewards of its expansion at the Tropicana Atlantic
City.
The Phoenix-based company said net income
was $15.4 million, or 41 cents a share, up from
$9.3 million, or 25 cents a share, in the year-ago
quarter.
On average, analysts were expecting earnings of
39 cents a share, according to Thomson First Call.
Revenue totaled $228.3 million, up 15% from $198.6
million a year before, but short of the $232.2 million
analyst consensus.
Last November, Aztar opened The Quarter, an expansion
of its Tropicana Atlantic City that includes a new
502-room hotel tower and a streetscape evocative
of Old Havana. Investors have been closely watching
the casino's performance, especially after the company's
last two quarters proved disappointing.
Excluding construction accident charges, earnings
before interest, taxes, depreciation and amortization,
or EBITDA, rose 50% year over year at the Atlantic
City casino.
"During the second fiscal quarter, casino
revenue at the Tropicana in Atlantic City grew 25%,
significantly outpacing the market," said Robert
M. Haddock, Aztar's chairman, president and chief
executive. "That level of revenue growth allowed
the property to more than cover the incremental
operating costs associated with the expansion and
to deliver a 25% EBITDA margin. Looking forward,
we believe that the expanded facilities at the Atlantic
City Tropicana will permit us to continue to drive
significant additional revenue growth and margin
expansion."
Aztar reported improvements elsewhere. Its Casino
Aztar riverboats in Indiana and Missouri together
showed a 12% year-over-year increase in EBITDA,
while the Tropicana Las Vegas saw EBITDA rise 6%
on better occupancy and average daily room rates.
Aztar's Ramada Express in Laughlin, Nev., saw flat
results compared with last year, however.
Before Aztar reported its quarter, its shares finished
Wednesday's session up 25 cents, or 0.7%, at $35.
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