NEW YORK (
fell short of third-quarter estimates, as gambling in the Las Vegas locals market remains weak.
The casino operator also said it will not exercise its right to match the offer
received for its 50% interest in the Borgata, their joint-venture in Atlantic City.
Earlier this month, MGM announced that it received an approximately $250 million offer for its 50% stake. While MGM did not reveal the name of the bidder, reports surfaced last week that Leonard Green was the suitor.
"We give Boyd credit for exercising caution here on increasing its exposure to the Atlantic City market," J.P. Morgan analyst Joseph Greff, wrote in a note. "In fact, Boyd indicated this would have generated an insufficient return on investment."
During the quarter Boyd earned $5.6 million, or 6 cents per share, compared with $6.3 million, or 7 cents, a year earlier. Excluding special items, Boyd actually earned 2 cents per share, less than analysts' forecast of 5 cents.
Revenue dropped 4% to $595.4 million, better than the $589 million Wall Street predicted.
Greff holds an underweight rating on Boyd given increasing competition in Pennsylvania, West Virginia and Delaware, and anticipation of weak recovery in the Las Vegas locals market.
-- Written by Jeanine Poggi in New York.
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