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Trump Misses Estimates

The casino operator's margins disappoint.

Trump Entertainment's


fourth-quarter loss came in worse than analysts expected, as margins at the company's properties disappointed.

The Atlantic City casino operator reported a quarterly loss of $9.7 million, or 31 cents a share, compared with a loss of $22.1 million, or 73 cents a share, a year earlier.

Trump's loss from continuing operations amounted to 33 cents a share. Analysts, on average, expected a loss of 24 cents a share, according to Thomson Financial.

Net revenue, meanwhile, rose 4% to $244.2 million. Wall Street projected a top line of $244.9 million.

In a research note, Deutsche Bank analyst Beth McNellis said Trump's property cash flow and margins came in lower than she expected. Trump's property EBITDA, or earnings before interest, taxes, depreciation and amortization, rose 27% to $44.9 million, $3.6 million below her estimates.

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EBITDA margins increased 330 basis points to 18.4%, about 90 basis points below Deutsche Bank projections. Results were below estimates at each of Trump's three Atlantic City properties.

Trump declined to give earnings guidance for 2007, citing the uncertain impact of competition from Pennsylvania slots and the

proposed partial smoking ban in Atlantic City. However, the company did say it will spend $275 million to $300 million on capital expenditures, including renovations and the construction of the new Taj Mahal hotel tower.

"We expect 2007 to be a year of both opportunities and challenges," Trump CEO Jim Perry said in a statement.

Trump has completed the first phase of its renovation program, mostly targeting the Taj Mahal and Trump Plaza properties. The planned renovation of Trump Marina is still in the works.

The company also announced the second phase of its renovation program, which will cost $140 million and will take place from now until the first quarter of 2008. The designs are still in planning and "will include significant physical changes at each of our properties."

Trump shares recently were down 22 cents, or 1.2%, to $17.81.