Caesars Entertainment Corp. (CZR), the largest owner of casinos in the U.S., reported a quarterly loss that missed analysts’ estimates after revenue in its main markets of Las Vegas and Atlantic City declined.
The first-quarter loss was $217.6 million, or $1.74 a share, compared with a $280.6 million loss, or $2.24, a year earlier, the Las Vegas-based company said in a statement today. Sales fell 2.9 percent to $2.14 billion. Analysts on average had estimated a loss of $1.59 a share on revenue of $2.19 billion, according to data compiled by Bloomberg.
Revenue in Las Vegas fell 2.6 percent to $751.7 million, hurt by construction projects as visits to Caesars casinos declined. In Atlantic City, revenue dropped 16 percent to $365.3 million, the company said, citing “continued competitive pressure in the region, weakness in the economic environment, and the slow recovery from Hurricane Sandy.”
Caesars’ two largest markets have experienced differing fortunes. Gambling revenue rose 31 percent to $696.1 million on the Las Vegas Strip in February, the most recent month for which data was available, according to the Nevada Gaming Control Board. In New Jersey, where Caesars is the largest player with four casinos, winnings for the industry fell 11 percent to $238.5 million in March, according to the state’s Division of Gaming Enforcement.
Shares in Caesars fell as much as 3.5 percent to $14.67 in extended trading after dropping 4.5 percent to $15.20 at the close in New York. The shares have more than doubled this year compared with a gain of 11 percent for the Standard & Poor’s 500 Index.
Caesars said last month it’s creating a venture that will raise as much as $1.2 billion to finance growth investments and bolster the parent company’s balance sheet. Caesars Growth Partners LLC intends to buy the Planet Hollywood Resort & Casino in Las Vegas as well as interests in the Horseshoe Baltimore casino project currently under development and the company’s interactive gaming unit.
The company, burdened by more than $20 billion in debt after the 2008 leveraged buyout by Apollo and TPG, has considered moves to strengthen its capital structure for the past five years. Caesars, which went public in 2012, didn’t want to sell more stock because it would dilute shareholders’ interests, and instead decided to sell growth-oriented holdings to raise immediate cash while still retaining a stake in those assets.
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