Caesars Entertainment Corp : Caesars Loss Widens on Sandy, Impairment Charges
02/25/2013| 05:26pm US/Eastern
Caesars Entertainment Corp.'s (CZR) fourth-quarter loss widened as superstorm Sandy contributed to the casino operator's revenue shortfall and results were also hurt by significant impairment charges.
Shares slid 6.1% to $11 after hours as revenue missed analysts' estimates, although the net loss was within the company's projections.
Caesars has struggled to recover fully from the recession, and hasn't posted a profit since late 2009. As its competitors have thrived in Macau, Caesars has been unable to acquire a gambling license there, and has been trying to unload its Macau properties. Instead, the debt-burdened company is dependent on U.S. markets like Las Vegas, which has seen a faltering comeback, and Atlantic City, N.J., which is poised to benefit from the impending statewide legalization of online gambling.
The company said that superstorm Sandy reduced its fourth-quarter revenue by about $40 million to $45 million because its Atlantic City properties were closed for five days and its property in Philadelphia was closed for two days. It had earlier estimated revenue reduction of $30 million to $35 million.
For the fourth quarter, Caesars reported a loss of $469.7 million, or $3.75 a share, compared with a year-earlier loss of $220.6 million, or $1.76 a share. The latest quarter included noncash charges of $448.2 million related to asset impairments.
The company last month estimated its loss at $452 million to $556 million, while analysts surveyed by Thomson Reuters were expecting a $268 million loss.
Revenue declined 4.3% to $2.02 billion, missing analysts' estimate of $2.11 billion.
Interest expenses were $527 million, from $674 million a year earlier.
In Caesars's Las Vegas segment, revenue was down 3.2%, as O'Shea's casino and several retail outlets at Harrah's Las Vegas were closed as part of Project Linq construction activities last year. Net revenue from Atlantic City slipped 19%, due mainly to Sandy.
Net revenue from the Iowa and Missouri region slid 4.6%, while the Illinois and Indiana segment reported a 2.2% decline. The company's Louisiana and Mississippi segment booked a 0.2% decrease in revenue.
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