Gaming:

Caesars boosts revenue, turns around loss in second quarter

Dealer Karine Martirosyan waits for players at her roulette table during the official opening Thursday, Oct. 30, 2014, of the Linq Hotel. The property, formerly Imperial Palace and the Quad, is in the process of a $223 million renovation.

Caesars Entertainment, the massive casino company whose Strip properties include Caesars Palace, the Flamingo and the Paris, reported its second quarter earnings today.

Company: Caesars Entertainment Corp. (NASDAQ: CZR)

Revenue: $1.14 billion, up 17.4 percent from the second quarter of 2014 — but those numbers don’t include revenue from Caesars Entertainment Operating Co., the company’s division that went into bankruptcy in January. Including the bankrupt division, revenue was $2.3 billion for the quarter, up 8 percent from last year.

Earnings: $15 million, compared to a loss of $91 million during the same time last year. Neither of those numbers includes the bankrupt division, which controls Caesars Palace.

Earnings per share: 10 cents, compared to a loss per share of $3.24 last year.

What it means: Caesars said its revenue increased because of recent renovations to the Linq hotel, growth in the company’s interactive division, “strong hospitality performance” and the relatively new additions of the Cromwell and Horseshoe Baltimore, both of which opened last year.

Caesars is split into multiple divisions that operate specific casinos and other aspects of the business. Net revenue from the bankrupt CEOC division declined 2 percent, which the company said was primarily because of lower reimbursable expenses year over year. The company also cited a “significant decrease in baccarat volume at Caesars Palace” as a contributing factor.

In the Caesars Entertainment Resort Properties division, which controls six casinos mostly in Las Vegas as well as the Linq promenade, revenue rose 5 percent from last year to $566 million. In the Caesars Growth Properties division, which includes Caesars’ interactive gaming business and six brick-and-mortar properties, revenue rose 31 percent to $576 million.

Among the casinos controlled by Caesars Growth Properties, revenue increased 33 percent year-over-year to $390 million. The properties performed well overall despite headwinds from a new smoking ban at Harrah’s New Orleans and civil unrest in Baltimore, which the company said “adversely impacted” Horseshoe Baltimore.

Interactive gaming proved a strong area for Caesars in the quarter, particularly social and mobile games. The company said its average monthly unique paying users grew 48 percent year over year, while average revenue per user increased 19 percent.

New CEO Mark Frissora said he’s exploring options to improve the company’s performance. He said Caesars may launch efforts to invest in hotel rooms at its Las Vegas properties, grow the active members of its Total Rewards loyalty program and improve back-end infrastructure and technology.

Frissora is working on a strategic plan for Caesars and plans to report more details later this year. He officially began as CEO July 1 — replacing Gary Loveman, who is still the company’s chairman — but served as CEO-designee for a few months before that.

Frissora characterized the ongoing efforts to restructure the bankrupt division as a “fluid process,” but he did not answer any specific questions because of ongoing negotiations with creditors.

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