Casino stocks fell Thursday after Harrah's ( HET) second-quarter profit missed estimates and Penn National Gaming ( PENN) issued disappointing guidance and said its president is leaving the company. Harrah's posted second-quarter earnings of $129 million, or 69 cents a share, up from $106 million, or 65 cents a share, a year ago. The company said it had earnings from continuing operations of 95 cents a share. Thomson First Call's average estimate was for EPS from continuing operations of $1.02. Harrah's shares recently were down $3.80, or 6%, to $60.05. The casino giant said its results were dragged down by higher project development and master planning costs for its future casino sites in the U.S., Europe and the Caribbean. Second-quarter same-store sales, which consist of properties that Harrah's has operated for more than 12 months, rose 5% from a year earlier. The comparison excludes properties closed due to hurricane damage last year, as well as the properties acquired from Caesars Entertainment a year ago. Meanwhile, Penn National's quarterly profit met Wall Street's targets, but the company's guidance fell short of analyst estimates. The weak forecast, coupled with the departure of President and Chief Operating Officer Kevin DeSanctis, sent shares tumbling $5.29, or 15% to $30.93. Penn's second-quarter net income rose to $42.7 million, or 49 cents a share, from $12.1 million, or 17 cents a year earlier. The earnings per share matched analysts' mean estimate of 49 cents. Net revenue rose to $537.8 million from $296.2 million. Penn raised its full-year guidance to $1.84 a share from prior target of $1.82. However, analysts are expecting EPS of $2.01 for the year. For the third quarter, Penn predicted earnings of 49 cents a share and revenue of $578.2 million. Wall Street had forecast earnings of 52 cents a share and revenue of $569 million.
Penn said DeSanctis will be leaving by the end of the year to form Revel Entertainment, which will focus on casino opportunities. Other casino stocks continued their slide from Wednesday on fears that a possible weakened U.S. consumer will result in disappointing casino profits in the second half of the year. Las Vegas Sands ( LVS) was recently down $3, or 4.8%, to $60.03 and Wynn ( WYNN) fell $3.42, or 5.2%, to $62.65.