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UPDATE 2-Pinnacle Entertainment posts profit on cost cuts
April 24, 2009 / 12:31 PM / 9 years ago

UPDATE 2-Pinnacle Entertainment posts profit on cost cuts

*Q1 adj EPS 8 cents vs. estimate loss 2 cents

*Shares up 5.4 pct

*

(Adds analyst note, stock rise)

NEW YORK, April 24 (Reuters) - Casino operator Pinnacle Entertainment Inc PNK.N posted a higher-than-expected quarterly profit on Friday as cost cuts aided margins, and its shares gained 5.4 percent.

Pinnacle reported a first-quarter net profit of $931,000, or 2 cents per share, compared with a profit of $5.1 million, or 8 cents per share, in the same period last year.

Excluding items such as development costs, profit came to 8 cents a share for the latest period, compared with a loss of 2 cents a share expected by analysts, on average, according to Reuters Estimates.

“We view Pinnacle’s results as another positive sign for the regional casino operators,” Goldman Sachs analyst Betsy Gorton said in a research note. “We expect Ameristar ASCA.O, Penn (PENN.O), and Pinnacle to continue to benefit from staycation/daycation trends, stabilizing margins, and scarcity of investable gaming stocks.”

Penn National Gaming, which operates in the United States but not in the gambling centers of Atlantic City and Las Vegas, reported better-than-expected quarterly profit on Thursday. Ameristar Casinos will report quarterly results next week.

At Pinnacle, first quarter revenue rose 4.8 percent to $269 million, while expenses fell about 7 percent.

Among key Pinnacle properties, revenues rose 40 percent at the Lumiere Place complex in St. Louis and gained about 9 percent at L‘Auberge du Lac in Lake Charles, Louisiana.

Las Vegas-based Pinnacle also operates casinos in Indiana, Nevada and Argentina.

Pinnacle shares were up 58 cents to $11.31 on the New York Stock Exchange. Ameristar was up 68 cents, or 4.5 percent, to $15.75 on Nasdaq, while Penn National added 73 cents, or 2.4 percent, to $31.49. (Reporting by Deepa Seetharaman and Karen Jacobs; Editing by Derek Caney)

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