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Penn National earnings outperform expectations in second quarter
By ROBERT CONNELLY
WYOMISSING, Pa.
Penn National Gaming Inc. continued a strong year with its second-quarter earnings released Thursday.
Net revenues for the second quarter, which was for the three months that ended June 30, was about $30 million higher than projections Penn National set April 23. It has a net revenue of $701 million, higher than the $672.7 million projected in April, and also higher than 2014 at this time, $652.1 million. The company’s net income was $16.9 million, higher than the projected $10.3 million in April, and quadruple that of 2014 at $4.2 million.
“Our year-over-year trends in July have been consistent to date,” said Jay Snowden, chief operating officer at Penn National. “No doubt that [our properties] are benefitting from an improving economy, gas prices that are still down from 90 cents to $1, or 30 percent year over year, and less cannibalization in some of our key markets than in prior years.”
Penn National said its adjusted earnings before interest, tax, depreciation and amortization came in at $85.7 million, higher than what was expected and also higher than where the company was at in 2014 at this time, $82.1 million. Earnings per share were $.19 from $.05 a year ago.
The majority of the earnings conference call hosted by Penn National officials Thursday was spent talking about three projects: the recent opening of Plainridge Park Casino in Massachusetts; continued development of Hollywood Casino Jamul-San Diego, which will be owned by the Jamul Indian Village of California and managed by Penn National; and the recent agreement to acquire Tropicana Las Vegas Casino Hotel Resort in Las Vegas.
There was some talk about Austintown’s Hollywood Gaming at Mahoning Valley Race Course. In response to a question about where patrons of the racino are coming from, Snowden said, “The lion’s share is coming from the state of Ohio within a 30-minute drive of the facility there, greater Youngstown. To a lesser extent Canton and Akron, we’re pulling business [from there] and actually, we’re getting a little bit more aggressive in those markets. We think we can penetrate more successfully than we have” there.
Snowden also said there is some business from the northwest corner of Pennsylvania, but reiterated that the “lion’s share” is from the greater Youngstown area.
In a news release, Timothy J. Wilmott, Penn National president and chief executive officer, said the earnings growth reflected “continued solid contributions from Hollywood Gaming at Dayton Raceway and Hollywood Gaming at Mahoning Valley Race Course, both of which opened in the third quarter of last year and more than offset the mid-2014 closure of Argosy Casino Sioux City” in Iowa.