Boyd Gaming Corporation (BYD) Pops Despite Lower Guidance

NEW YORK (TheStreet) -- Boyd Gaming Corporation (BYD) defied logic on Friday, adding double-digit percentage value after downwardly revising its guidance for the fourth quarter. By late afternoon, shares had added 10.5% to $10.56. Trading of 8.3 million shares was more than double its three-month average daily volume.

For the quarter, the company expects Borgata, its Atlantic City casino, to report adjusted EDITDA of $15 million to $17 million, compared to previous guidance of between $22 million and $24 million. The lower guidance is a result of several short-term factors in December: an unusually low hold percentage and severe winter weather over two weekends.

As a whole, the company expects to report adjusted EBITDA at the lower end of previous guidance for $105 million to $110 million. Management said the company's operations performed in-line with expectations, despite the impact of soft market conditions and wintery weather.

"Despite short-term challenges at Borgata, we remain optimistic about the overall direction of our business. We are confident that the investments and refinements we have made throughout the business, our improving financial position, and our leadership position in real-money online gaming will fuel further momentum in our business in 2014 and beyond," said CEO Keith Smith in a statement.

The Las Vegas-based company forecasts a per-share loss of 21 cents to 27 cents a share, compared to previous guidance for a loss between 15 cents and 20 cents a share. Analysts surveyed by Thomson Reuters had expected a quarterly loss of 20 cents a share. 

TheStreet Ratings team rates BOYD GAMING CORP as a Hold with a ratings score of C-. The team has this to say about their recommendation:

"We rate BOYD GAMING CORP (BYD) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity."

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