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Boyd Gaming Tops Forecasts

Fourth-quarter profits double, boosted by insurance recoveries. Shares jump.

Updated from 9:32 a.m. EST

Boyd Gaming

(BYD) - Get Boyd Gaming Corporation Report

doubled its fourth-quarter profit, helped by insurance recoveries from Hurricane Katrina damage to its Louisiana casino.

That boost helped mitigate continued weakness in the company's casinos that cater to local residents in the Las Vegas market.

Boyd reported quarterly income from continuing operations of $55.6 million, or 63 cents a share, up from $25.8 million, or 28 cents a share, a year earlier.

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The results included $36 million of insurance claims related to hurricane damage at the company's Delta Downs casino in Louisiana. Along with other one-time benefits, these adjustments added $15.7 million, or 18 cents a share, to earnings.

Excluding these items, earnings were 45 cents a share, beating the average analyst estimate of 39 cents, according to Thomson Financial.

Boyd's net revenue fell 4.2% to $520.8 million in the quarter. Property cash flow slid 4.5% at Boyd's casinos that cater to the Las Vegas locals market, which represent slightly less than half of the company's business. That was better than the third-quarter results, in which property cash flow at these casinos fell 21% from the prior year.

Investors appeared to like the sequential operating improvement at the casinos. Boyd shares recently were up nearly 7% to $49.08.

Boyd said it will begin construction of its Echelon Place development in the second quarter. This project sits at the site of the former Stardust Casino on the northern end of the Las Vegas Strip.

Boyd also said it increased the budget on the wholly owned part of the project to $3.3 billion, principally because of additional scope, larger rooms, and increased construction costs. Echelon Place will include about 5,000 rooms in five luxury hotels, with 140,000 square feet of casino space.