Harrah's Swings to a Loss

Fourth-quarter revenue rises 76.2%.
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Casino owner

Harrah's Entertainment

(HET)

said fourth-quarter revenue jumped thanks to the big boost it received from last year's acquisition of Caesars, but the company swung to a loss after recording more than $200 million in writedowns and reserves.

Revenue grew to $2.1 billion, up 76.2% from $1.2 billion in the 2004 fourth quarter. The company lost $142.2 million, or 78 cents a share, after recording the writedowns that were mostly related to property sales and hurricane damage on the Gulf Coast. Harrah's earned $76.9 million and 68 cents a share in the year-ago quarter.

On an adjusted basis, Harrah's had earnings from continuing operations of 66 cents a share in the fourth quarter. Analysts surveyed by Thomson First Call were looking for a profit of 56 cents and revenue of $2.06 billion.

For all of 2005, revenue rose 56.3% to $7.1 billion from $4.5 billion, again reflecting last June's purchase of Caesars. The company took a hit, however, late last August when it was forced to close three Gulf Coast casinos because of the approach of Hurricane Katrina.

Harrah's Grand Casino Gulfport and Grand Casino Biloxi in Mississippi were destroyed by the storm. Harrah's New Orleans sustained damage and couldn't reopen for months. In September, Harrah's Lake Charles in Louisiana suffered extensive damage from Hurricane Rita. The property's 263-room hotel reopened this month, but the casino space won't resume operations in the foreseeable future.

The company is exploring alternatives that could include leaving the Lake Charles market.

Shares of Harrah's were up $1.03, or 1.4%, to $73.39 Wednesday.