announced second-quarter earnings that easily beat analyst estimates, but it issued cautious guidance for the remainder of the year, sending shares down 2.9%.
Station posted second-quarter net income of $29 million, or 43 cents a share, up from $20.6 million, or 33 cents a share, it had a year earlier. Excluding all nonrecurring items, which is how analysts view the company, Station earned $34.8 million, or 52 cents a share -- better than the 49-cent analyst estimate, according to Thomson One, and slightly more than double the year-ago earnings of 25 cents a share.
Total revenue came in at $240.2 million, higher than the $237.7 million expected by Wall Street and up 14% year over year. The company's top-line growth was driven by Las Vegas results, where Station caters to the locals' market.
Revenue from Las Vegas casinos that were open a year ago rose 12% annually, with EBITDA margins of 37.3%. Station's Green Valley Ranch, currently featured on the Discovery Channel TV show "American Casino," was a big winner in the quarter, pulling in $8.8 million in earnings, excluding all items.
"Our operating performance has long been a proxy for the health of the Las Vegas economy. We are seeing significant population growth, substantial investment in the community in the form of new housing as well as other development and strong consumer confidence," said Glenn Christenson, CFO.
But going forward, Station hinted the red-hot Las Vegas market might be cooling some, narrowing its earnings guidance below current Wall Street expectations. The company said third-quarter earnings would come in between 37 and 42 cent a share, less than the 45-cent estimate. For the full year, Station said that earnings would come in between $1.84 and $1.93 a share, which is also lower than the current estimate of $1.94 a share.
In reaction to the warning, Station shares fell $1.40 to $46.20.
( HET) is the next major casino group to report earnings, on July 21. Harrah's is reportedly close to inking a deal to acquire
, according to
The Wall Street Journal
In addition to earnings, Station's board declared a quarterly dividend of 17.5 cents a share, payable to shareholders of record as of Aug. 13 on Sep. 3 -- and announced that a top executive will be leaving at the end of 2004.
After coming out of retirement to help the company three years ago, Steven Cavallaro, the company's COO, announced that he will be retiring on Dec. 30. The company said he will continue to be involved in the company's operations as a consultant over the next two years. Cavallaro will be replaced by William Werner, who is currently the chief development officer.