What to Expect When Caesars Entertainment (CZR) Reports Earnings Today
NEW YORK (TheStreet) -- Shares of Caesars Entertainment (CZR) - Get Report are up 3.11% to $10.93 in late morning trading Monday, ahead of the casino-entertainment company's fourth quarter 2014 earnings release after the market closes today.
Caesars has not been able to report profits in its last few quarters, reflecting the company's heavy debt load which pushed up interest expenses.
For the fourth quarter, analysts are expecting the company to report a loss of $1.65 per share, better compared to the year ago loss of $12.83 per share.
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Revenue is expected by analysts to come in at $2.22 billion for the fourth quarter, higher than the year ago sales of $2.08 billion Caesars posted.
Las Vegas-based Caesars Entertainment is a diversified casino-entertainment provider with its business primarily conducted through a wholly owned subsidiary, Caesars Entertainment Operating Company.
The company owns, operates, or manages 52 casinos in 13 U.S. states, as well as seven countries.
The majority of these casinos operate domestically, primarily under the Caesars, Harrah's, and Horseshoe brand names.
Separately, TheStreet Ratings team rates CAESARS ENTERTAINMENT CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate CAESARS ENTERTAINMENT CORP (CZR) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Hotels, Restaurants & Leisure industry. The net income has decreased by 19.3% when compared to the same quarter one year ago, dropping from -$761.40 million to -$908.10 million.
- Net operating cash flow has significantly decreased to -$87.20 million or 288.33% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Looking at the price performance of CZR's shares over the past 12 months, there is not much good news to report: the stock is down 57.62%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- CAESARS ENTERTAINMENT CORP's earnings per share declined by 7.6% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CAESARS ENTERTAINMENT CORP reported poor results of -$21.43 versus -$11.12 in the prior year. This year, the market expects an improvement in earnings (-$4.70 versus -$21.43).
- The gross profit margin for CAESARS ENTERTAINMENT CORP is rather high; currently it is at 50.32%. Regardless of CZR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CZR's net profit margin of -41.04% significantly underperformed when compared to the industry average.
- You can view the full analysis from the report here: CZR Ratings Report