A better-than-expected third quarter and bullish guidance helped
Penn National Gaming
(PENN - Get Report)
shares avoid the selloff afflicting the gambling sector.
Most other casino stocks slumped on continued general investor pessimism exacerbated by analyst downgrades Thursday on
(MGM - Get Report)
(WYNN - Get Report)
(BYD - Get Report)
The Dow Jones U.S. Gambling Index was down 1.7% late in the session.
Penn National went counter to the trend, its shares rallying $1.32, or 5%, to $27.62, as the company's third-quarter report offered enough positives for investors to shrug off a downgrade from KeyBanc Capital Markets.
The Wyomissing, Pa., casino operator reported third-quarter earnings of $55.4 million, or 64 cents a share, up from $17.2 million, or 21 cents a share, a year before.
During the quarter, Penn National incurred $19.1 million of pretax expenses related to Hurricane Katrina but recorded an after-tax gain of $35.6 million from the sale of the Hollywood Casino-Shreveport.
Excluding those items, Penn National had adjusted earnings of 37 cents a share, well ahead of the 31-cent average Wall Street estimate from Thomson First Call.
Revenue was $294.6 million, up from $288.6 million a year before but less than the $297.1 million consensus forecast.
Although Hurricane Katrina damaged Penn National's Casino Magic-Bay St. Louis and Boomtown Biloxi casinos, its properties elsewhere delivered strong results, particularly its Baton Rouge casino, which saw a spike in traffic in the aftermath of the hurricane.
The Charles Town, Hollywood Casino-Aurora and Casino Rama all saw double-digit percentage increases in earnings before interest, taxes, depreciation and amortization, or EBITDA.
Penn National's results didn't include the acquisition of
, which was completed on the first business day of the fourth quarter.
The company's guidance also encouraged investors. Penn National expects fourth-quarter adjusted earnings of 42 cents a share, ahead of the 38-cent consensus. For the full year, Penn National forecasts a profit of $1.48 a share, up from its previous guidance of $1.30 and better than the $1.40 analyst consensus.