Caesars previews fourth-quarter results, expects EBITDA, revenue to miss expectations
Caesars Entertainment Inc. (NASDAQ: CZR ) gave investors a preliminary assessment of its fourth-quarter results on Thursday, and it looks like the company may miss earnings before interest, taxes, depreciation, and amortization (EBITDA) and analysts income expectations.
Harrah’s operators said in a Form 8-K filed with the U.S. Securities and Exchange Commission (SEC) that it expects sales of $2.815 billion to $2.835 billion in the December quarter, well below Wall Street expectations of $2.89 billion. On the Las Vegas Strip, Caesars is the second-largest operator with sales expected at $1.088 billion to $1.094 billion, up from $1.154 billion last year.
The gaming company's fourth-quarter loss is expected to be between $4 million and $157 million, with EBITDA expected to be between $920 million and $940 million. Analysts expected $957 million.
Caesars has not yet completed the settlement process for its financial statements for the three months ended December 31, 2023. “During this process, Caesars may identify items that require adjustments to its expected preliminary operating results,” according to the regulatory filing."Beyond routine closing procedures, Caesars has not finalized its annual tax provisions or drawn final conclusions on the assumptions used to determine the estimated fair value of its indefinite-lived intangible assets and associated goodwill reporting units." Use Passed."
The gaming company is expected to provide a financial update for the December quarter after U.S. stocks close on February 20.
The operation of Caesars Hotel Las Vegas is neat, but...
Caesars said occupancy on the Las Vegas Strip rose to 97.9% in the final three months of 2023, up from 95.5% a year ago. That number might have been even better without the 65,000 room nights lost to construction at Caesars Palace and Paris.
On the other hand, there are signs the operator isn't enjoying the same benefits as rivals MGM Resorts International (NYSE: MGM ) and Wynn Resorts (NASDAQ: WYNN ) Las Vegas Grand Prix Offers. Caesars said table gaming fell 1% in the fourth quarter, with table gaming share falling to 21% from 23% a year ago.
Despite disappointing fourth-quarter guidance, Caesars remains favored by some analysts. Stifel's Steven Wieczynski reiterated a buy rating and $67 price target on the stock today.
"With CZR, you have what we believe to be the best management team in gaming and a company that should generate significant free cash flow in any normalized environment," the analyst noted. "We believe the company can mitigate its balance sheet, which in turn should attract long-term investors to participate."
Caesar iGaming Updates
It's a well-known saying in the sports betting industry right now: a tough November appears to have hurt Caesars Digital's performance in the final three months of 2023.
Caesars Digital’s fourth quarter net sales, net income (loss) and Adjusted EBITDA reflect improved sports betting and iGaming processing compared to the same period last year,” the operator said in an SEC filing. “Sports betting holdings were negatively impacted in November and were below our typical range. Based on our typical holding range, we estimate the negative impact from the low level of sports betting suspensions in November to be approximately $44 million in net income and approximately $29 million in net income and adjusted EBITDA. "
Wieczynski added that he believes Caesars management will ultimately be able to extract value from the iGaming/sports betting division.
Read also:
- Football 101: What is relegation in football?
- Las Vegas could be an Atari-themed casino resort
- Pennsylvania bookies win $444.5 million in November, sports betting hits record
- The $1.35 billion millionaire is suing his ex for telling his parents about his lottery win
Source: www.casino.org
