Odds Raised for Casino Profit Shortfalls

Jacob says that Boyd's results could be worse than people are expecting because its new South Coast property hasn't fully ramped up.

Boyd opened the South Coast property in December, but road constructions delays have hampered returns. Analysts say the property, which is located minutes away from the southern end of the Vegas Strip, won't reach its full potential until the Interstate 15 interchange is constructed in late 2007.

"Investors will be looking for management's thoughts on how to improve South Coast and what their thoughts are on the competitive environment," Jacob says.

Boyd is expected to report earnings of 58 cents a share, up from an adjusted profit of 56 cents a share a year ago, on revenue of $626.6 million. Majestic Research, which uses proprietary tracking data to forecast sales growth, estimates Boyd's revenue will be $593 million to $607 million. Majestic does not provide earnings forecasts.

Elsewhere in the gaming sector, Harrah's Entertainment(HET Quote) will report its second-quarter results on Thursday. The stock has been under pressure lately due to the overall worries about a slowdown in Las Vegas and other markets, as well as concerns about the company's capital expenditure plans.

According to First Call, analysts expect Harrah's to report second-quarter earnings of $1.02 a share, up from 90 cents last year. Revenue is expected to grow to $2.36 billion from $1.47 billion.