Penn National Gaming 3Q profit falls, revenue up

WYOMISSING, Pa. (AP) — Penn National Gaming Inc. said Wednesday that its third-quarter profit slid 86 percent from a year ago, when results benefited from a termination fee after its proposed acquisition was called off.

The casino operator reported net income of $21.4 million, or 20 cents per share, for the period ended Sept. 30. That's down from $147.5 million, or $1.69 per share, a year earlier.

Year-ago results included a $195.5 million settlement payment. Fortress Investment Group LLC and Centerbridge Partners LP scrapped a $5.82 billion deal to acquire Penn in July 2008 after the company's stock price fell. At the time, Penn National was promised $225 million in cash as a termination fee, plus $1.25 billion in what amounts to no-cost capital until 2015.

Penn's quarterly results missed the 35 cents per share estimate of analysts polled by Thomson Reuters. Analysts' estimates normally exclude one-time items.

Revenue edged up to $620.4 million from $617.9 million on improved gaming results, but fell short of Wall Street's $642 million estimate.

While revenue increased, Penn said it is still struggling with a consumer spending pullback prompted by the recession. Gamblers have spent less in the casino on non-gamingcomponents such as food, drinks and hotels during the economic downturn as they look to limit their discretionary spending.

Penn lowered its full-year earnings and revenue outlooks. The company now anticipates profit of $1.01 per share on revenue of $2.39 billion. Its prior forecast was for earnings of $1.27 per share on revenue of $2.46 billion.

Analysts expect net income of $1.38 per share on revenue of $2.45 billion for the year.

For the fourth quarter, Penn predicts profit of 16 cents per share on revenue of $577.2 million. The guidance is below analysts' expectations for quarterly earnings of 28 cents per share on revenue of $607.6 million.

Shares fell $1.35, or 4.9 percent, to $26 in premarket trading.