May 11, 2020 / 8:21 PM / 3 months ago

Shut casinos hit Caesars as COVID-19 puts gambling industry in survival mode

(Reuters) - Caesars Entertainment Corp (CZR.O) missed quarterly revenue estimates on Monday as it shuttered its casinos amid nationwide lockdowns to contain the spread of the COVID-19 pandemic.

FILE PHOTO: The 550 foot-tall (167.6 m) High Roller observation wheel, the tallest in the world, is the centerpiece of the $550 million Linq project, a retail, dining and entertainment district by Caesars Entertainment Corp, in seen in Las Vegas, Nevada April 9, 2014. The wheel is. REUTERS/Las Vegas Sun/Steve Marcus

The gambling industry, which counts on air travel and large groups of people in close proximity, is one of the hardest hit from the restrictions imposed to check the health crisis.

“Our first-quarter performance reflects the significant revenue declines we experienced as a result of the closures and stable year-over-year labor costs in March,” Chief Executive Officer Tony Rodio said in a statement.

He said the company was taking aggressive steps to strengthen its financial position, which included furloughing 90% of its employees in North America.

Caesars said almost all its casinos worldwide have been closed since March 17 and warned of an estimated daily cash burn of $9.3 million. As of March 31, it had more than $2.6 billion in liquidity.

SunTrust analyst Barry Jonas said investor focus is squarely on Caesars’ current cash burn rate and the phased property reopening strategy.

The company said it would implement a phased reopening of its properties in Las Vegas, Atlantic City, Council Bluffs and Lake Tahoe.

In the first quarter, casino revenue fell 11.5% to $958 million. Net revenue fell 13.6% to $1.83 billion and missed analysts’ average estimate of $2.04 billion, according to Refinitiv data.

Net income attributable to Caesars was $189 million in quarter ended March 31 compared with a loss of $217 million a year earlier.

On a per share basis, its loss rose to 36 cents per share from 32 cents per share a year ago.

Reporting by Sanjana Shivdas in Bengaluru; Editing by Arun Koyyur

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