The Zacks Analyst Blog Highlights: Las Vegas Sands, Caesars Entertainment, Pinnacle Entertainment, MGM Resorts International and Penn National Gaming
For Immediate Release
Chicago, IL – October 21, 2014 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Las Vegas Sands Corp. (LVS-Free Report), Caesars Entertainment Corp. (CZR-Free Report), Pinnacle Entertainment Inc. (PNK-Free Report), MGM Resorts International (MGM-Free Report) and Penn National Gaming Inc. (PENN-Free Report).
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Here are highlights from Monday’s Analyst Blog:
Gambling Stock Roundup
Last week, ended on a positive note as Las Vegas Sands Corp.’s (LVS-Free Report) earnings came in line with the Zacks Consensus Estimate. This created a sense of hope for other gambling companies that also earn a major part of their revenues from Macau. Share prices of most players in the space increased as investors found something to cheer about.
Macau has been posting weak performance over the past few months. Growth in mass market gambling and the non-gaming segment partly tempered the effect of a decline in VIP gambling.
Other stocks continued to work toward recovery. While Caesars Entertainment Corp. (CZR-Free Report) officially announced that it is in discussions with certain bank debt creditors to curtail its debt, Pinnacle Entertainment Inc. (PNK-Free Report) opened a new gaming terrace at its Belterra Park Gaming & Entertainment Center in Ohio that will permit smoking on premises.
In one other development, MGM Resorts International (MGM-Free Report) is reportedly planning to sell the Gold Strike Hotel & Gambling Hall located in Nevada. (Read last to last week’s development: Gambling Stock Round Up for Oct 13, 2014)
Recap of the Week’s Important Stories:
1. Las Vegas Sands’ third quarter 2014 adjusted earnings of 84 cents per share were in line with the Zacks Consensus Estimate while it increased 2.4% year over year owing to lower operating expenses. Quarterly net revenue of $3.53 billion missed the Zacks Consensus Estimate of $3.67 billion by 3.8% and declined 1% year over year. Gross gaming revenues in Macau had declined in all the three months of the quarter.
The downside reflects the slowdown in gambling in Macau as high-stake gamblers curtailed spending amid a cooling Chinese economy. Also, it comes in the wake of a nationwide crackdown on corruption in China that compelled Macau officials to impose restrictions on VIP gamblers in order to stop billions of dollars from being siphoned off illegally from mainland China to Macau. (Read: Las Vegas Sands' Q3 Earnings in Line, Revenues Miss)
2. Caesars Entertainment and its subsidiary Caesars Entertainment Operating Company, Inc. (:CEOC) issued a filing stating it has begun formal discussions with certain bank debt creditors to find ways to ease pressure on its $24.2 billion debt. This reflects the company’s commitment to work constructively with creditors to deleverage its most senior lenders of its largest unit, CEOC and create a sustainable capital structure for CEOC that is in the best interest of all stakeholders.
In fact, the company has been working on these lines for quite some time. Two weeks back, the company announced in a SEC filing that it has granted CEOC, a right to receive first claim to the potential payments. Per the right, these lenders get the first right to possible proceeds from the lawsuits brought against the company.
Prior to that, the company designed a comprehensive plan to aid independent stock listing and significant de-leveraging of its subsidiary, Caesars Entertainment Operating Co. (:CEOC). (Read: Caesars Entertainment Soars on Funding Plan)
3. MGM Resorts has reportedly entered into a purchase and sale agreement last week with JETT Gaming and Jean Ventures to sell the Gold Strike Hotel & Gambling Hall located in Nevada for an undisclosed amount. JETT Gaming is a slot machine route company that owns and operates slots at 131 locations and is owned by the Herbst family. The sale comes in the wake of the company's continued efforts to refine its portfolio and focus on new developments in international and regional market.
4. Pinnacle Entertainment opened a new gaming terrace at Belterra Park Gaming & Entertainment Center in Cincinnati, OH with a smoking facility. The terrace featuring 82 video lottery terminals and beverage service and other amenities has its own entrance from Belterra Park's gaming floor. The gaming terrace will be open all throughout the year. Moreover, this gaming terrace with a smoking facility is the first of its kind in Cincinnati.
This Gaming & Entertainment Center features 1,500 games and six dynamic restaurants, River Downs Club where simulcast wagering takes place, a VIP Lounge, live racing on a 1 mile dirt track, pari-mutuel wagering and complimentary self and valet parking. Also, a turf track will be opened at this entertainment destination marking the first turf track in Ohio.
5. In one other development, the Massachusetts Gaming Commission announced that Penn National Gaming Inc. (PENN-Free Report) has exceeded its construction diversity vendor goals during the construction period of Plainridge Park Casino. The projects goals were to provide 4% contracts for minority-owned businesses, 7% for women-owned businesses, and 3% for veteran-owned businesses.
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