he world’s largest casino operator by revenue reported earnings grew to us$ 244.4 million, from us$ 177.2 million in the prior year. Revenue rose 13 percent to us$ 2.84 billion from us$ 2.5 billion. Adjusted earnings from continuing operations climbed to us$ 1 per share from 94 cents.
Analysts polled by Thomson Financial expected net income on that basis of us$ 1.01 per share on revenue of us$ 2.69 billion. The earnings estimates typically exclude on e-time items.
Revenue in Las Vegas, where it operates properties such as Caesars Palace, Flamingo and Bally’s, increased 11 percent to us$ 900.4 million, while Atlantic City revenue climbed 20 percent to us$ 671.5 million. Among Harrah’s Atlantic City properties are Harrah’s, the Showboat, Caesars Atlantic City and Bally’s.
The Las Vegas results benefited from the acquisition of Bill’s Gamblin’ Hall & Saloon in the first quarter, while revenue in the Atlantic City region was helped by the strong performance of the Harrah’s Chester Casino and Racetrack in Pennsylvania, which also opened in the first quarter, the company said.
Harrah’s said "effective marketing" led to stability in the Atlantic City market, which has been hit hard by a partial smoking ban and new slots parlors in neighboring states.
Analyst Dennis Farrell of Wachovia Capital Markets said that meant the company was spending a lot of money to lure gamblers with freebies and promotions. "In our opinion, the company will carry on with its customer buying spree until the (leveraged buyout) closes," he said in a research note.
Revenue in the Gulf Coast region rose 4 percent to us$ 391.6 million, but was capped by renovations at the Grand Casino Tunica in Mississippi, which are expected to take 12 more months. In the Iowa/Missouri region, revenue was flat at us$ 206.8 million, while it grew 4.5 percent in Illinois and Indiana.
Revenue from properties in Nevada outside Las Vegas fell 4 percent to us$ 176.4 million, hurt by summer wildfires in the Lake Tahoe area. International revenue surged 177 percent to us$ 165.1 million following the late 2006 acquisition of London Clubs International, which operates seven casinos in the UK, two in Egypt, one in South Africa and is a consultant for a casino in Lebanon.
After announcing last December that its board had agreed for the company to be acquired by Texas Pacific Group and Apollo Management Group for us$ 90 a share, the company has continued to announce new expansion plans. The deal is expected to close by early next year.
In the third quarter, the company announced a us$ 1 billion overhaul of Caesars Palace in Las Vegas, including the construction of a 665-room hotel tower, and said it would partner with AEG to build an arena capable of housing a professional sports franchise near the Las Vegas Strip. It also said it acquired Macau Orient Golf on the Chinese gambling enclave to serve its high-rolling clients, although the company lacked the right to develop a casino there.