International edition
June 19, 2021

Revenue rises 2.9 % to us$ 638.3 million

Penn National Gaming ups financial year outlook and shares rise

(US).- Penn National Gaming posted a higher-than-expected quarterly profit as margins improved, and the casino operator raised its full-year outlook, sending its shares up 4.2 %. Cost-cutting and the addition of new table games at two casinos helped drive a margin increase that CEO Peter Carlino called "significant."

D

espite success in reining in costs, "the market is still tight and most of the places where we do business consumers have considerably cut their spend," Carlino said on conference call with analysts and investors. "One way or the other, growing revenue in the bottom line is our goal."

During the quarter, Penn placed table games at Hollywood Casino at Charles Town Races in West Virginia and Hollywood Casino at Penn National Race Course in Pennsylvania, driving higher traffic at those properties.

The extra revenue that flowed from those table games helped push margins higher. Margins at the property level before interest, taxes, depreciation and amortization rose to 28.5 % from 27.8 % last year.

"Margin strength continues to demonstrate management's ability to manage costs while not over-spending on promotions," wrote analyst Stifel Nicolaus analyst Steven Wieczynski in a note to clients, adding that lower corporate expenses also contributed to the margin increase. Wieczynski has a "buy" rating and a us$ 36 price target on Penn shares.

Penn, which operates casinos, racetracks and off-track wagering sites in 15 US states and Ontario, Canada, posted third-quarter net income of us$ 48.3 million, compared with us$ 21.4 million a year earlier. Revenue rose 2.9 % to us$ 638.3 million.

Excluding special items, the company earned 37 cents a share, beating analysts' average estimate of 33 cents, according to Thomson Reuters I/B/E/S.

Penn, which earlier this month agreed to acquire a Las Vegas casino from lenders, raised its full-year profit forecast to us$ 1.15 per share from 98 cents. It expects revenue of us$ 2.46 billion. "We suspect Penn is not being overly aggressive with respect to guidance - much as it has all year," J.P. Morgan analyst Joseph Greff said in a research note.

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