Boyd Gaming 3Q profit falls as gamblers spend less

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LAS VEGAS -Boyd Gaming Corp. said Tuesday that its third-quarter profit fell as the weak economy took a toll on the casino operator's revenue and plans for expansion.

Gamblers continued to spend less at its properties, Boyd said, and warned that it doesn't expect to restart construction of its $4.8 billion Echelon resort in Las Vegas for three to five years.

"While visitation levels remained fairly constant, spend per visitor continues to be down significantly year-over-year, as consumers are still being cautious with their spending," CEO Keith Smith said in a statement.

In the three months ended Sept. 30, Boyd earned $6.3 million, or 7 cents per share. That's off 28 percent from the $8.7 million, or 10 cents per share, from a year ago.

Adjusted profit was 9 cents per share, which accounts for a $14.4 million gain related to an insurance settlement that offset a $13.5 million impairment charge related to a joint venture with Morgans Hotel Group at Echelon.

Analysts surveyed by Thomson Reuters, whose estimates usually exclude one-time items, expected earnings of 10 cents per share.

Revenue declined 7 percent to $398.2 million from $426.5 million, missing Wall Street's $411.2 million estimate.

While Boyd was less promotional, it was not enough to combat the ongoing pullback in consumer spending. Gaming revenue dropped 5.6 percent to $332.1 million, while revenue from food and beverage fell 7 percent to $55.7 million. Room revenue declined 9 percent to $30.1 million.

Because of the continued economic downturn, significant new supply and a difficult capital market, Smith said Echelon's construction would not resume sooner. But he maintained that Las Vegas is still an important market for the company.

Boyd reduced its costs and expenses to $389.5 million from $400.1 million during the quarter.

The Las Vegas company operates properties in Nevada, New Jersey, Mississippi, Illinois, Indiana, and Louisiana.

2009-10-27 09:17:46