Caesars Entertainment Loss Widens on Atlantic CityChristopher Palmeri
Caesars Entertainment Corp., the largest owner of casinos in the U.S., said its net loss widened to $761.4 million after the company wrote down properties in Atlantic City and gambling revenue shrank.
The loss totaled $6.03 a share, including $930.9 million in impairment charges, the company said today in a statement. Operating income in Las Vegas, where Caesars is based, more than doubled due to higher revenue and lower expenses.
Regional competition hurt casino revenue in Atlantic City, Caesars said. Results in other markets outside Nevada also trailed a year earlier, the company said. Caesars sold part of its holding in a Uruguay casino, which also contributed to a 7.1 percent drop in total casino revenue.
Caesars was expected to lose $1.28 a share, the average of seven analysts’ estimates compiled by Bloomberg. Third-quarter revenue fell 0.7 percent to $2.18 billion, missing the $2.24 billion average estimate of analysts.
The company said it sold its Claridge Hotel Tower in Atlantic City to TJM Properties Inc., a hotel operator in Clearwater, Florida. Terms weren’t disclosed. TJM plans to upgrade the rooms and install a new front desk and restaurant, Caesars said in a statement.
In addition, Apollo Global Management LLC and TPG Capital, the two private equity firms that bought Caesars in a 2008 leveraged buyout, said they would increase their investment in Caesars Acquisition Corp., a new entity that will own an interest the company’s online gaming business.
The firms will purchase $600 million of stock in the offering, up from $457.8 million. The offering is expected to close Nov. 18.
Caesars fell 3.5 percent to $17.75 in extended trading after the results were announced. The stock declined 0.9 percent to $18.40 at the close in New York and has more than doubled this year.
The company pulled out of a Massachusetts casino project on Oct. 18 after regulators recommended the company be denied a license. Caesars also said its under U.S. grand jury investigation for possible violations of banking laws.