Aztar Profits From Expansion

Second-quarter revenue totaled $228.3 million, up 15% from a year before.
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profits rose 65% in the second quarter as the casino operator reaped the rewards of its expansion at the Tropicana Atlantic City.

The Phoenix-based company said net income was $15.4 million, or 41 cents a share, up from $9.3 million, or 25 cents a share, in the year-ago quarter.

On average, analysts were expecting earnings of 39 cents a share, according to Thomson First Call.

Revenue totaled $228.3 million, up 15% from $198.6 million a year before, but short of the $232.2 million analyst consensus.

Last November, Aztar opened The Quarter, an expansion of its Tropicana Atlantic City that includes a new 502-room hotel tower and a streetscape evocative of Old Havana. Investors have been closely watching the casino's performance, especially after the company's last two quarters proved disappointing.

Excluding construction accident charges, earnings before interest, taxes, depreciation and amortization, or EBITDA, rose 50% year over year at the Atlantic City casino.

"During the second fiscal quarter, casino revenue at the Tropicana in Atlantic City grew 25%, significantly outpacing the market," said Robert M. Haddock, Aztar's chairman, president and chief executive. "That level of revenue growth allowed the property to more than cover the incremental operating costs associated with the expansion and to deliver a 25% EBITDA margin. Looking forward, we believe that the expanded facilities at the Atlantic City Tropicana will permit us to continue to drive significant additional revenue growth and margin expansion."

Aztar reported improvements elsewhere. Its Casino Aztar riverboats in Indiana and Missouri together showed a 12% year-over-year increase in EBITDA, while the Tropicana Las Vegas saw EBITDA rise 6% on better occupancy and average daily room rates.

Aztar's Ramada Express in Laughlin, Nev., saw flat results compared with last year, however.

Before Aztar reported its quarter, its shares finished Wednesday's session up 25 cents, or 0.7%, at $35.