Caesars Entertainment, the casino giant that operates many big resorts on the Strip and elsewhere, reported its fourth quarter and full-year earnings Tuesday.
Company: Caesars Entertainment Corp. (NASDAQ: CZR)
Revenue: $1.12 billion for the fourth quarter, up 8.7 percent from last year. Those numbers do not include results from Caesars Entertainment Operating Co., or CEOC, the company division that filed for bankruptcy in January 2015. Including results from that division, Caesars’ net revenue was $2.21 billion, up 3.6 percent from in the fourth quarter one year earlier.
For the full year, Caesars’ net revenue excluding CEOC was $4.5 billion, up 14.7 percent from comparable revenues in 2014. Including CEOC, Caesars said its 2015 net revenue was $9.05 billion, up about 6 percent from the year before.
Loss/Earnings: The company reported a $76 million net loss in the fourth quarter, compared to a reported net loss of $1.02 billion in the same time period one year earlier. For the full year, Caesars reported net income of $5.92 billion, compared to a reported net loss of $2.78 billion in 2014.
Loss/Earnings per share: The company reported a loss of 54 cents per share in the fourth quarter, compared to a reported loss of $7.08 per share in the fourth quarter of 2014. For the full year, Caesars reported earnings of $40.26 per share, compared to a reported loss of $19.53 per share in 2014.
What it means: Caesars said its full year revenue increase was aided by growth in hotel revenue, with cash average daily room rates “up double-digits,” according to the company’s online presentation about its latest earnings report. The hotel business also benefitted from expanded resort fees across all Caesars properties and “improved pricing power in Las Vegas,” the company said.
Additionally, Caesars said that an entire year of operations from The Cromwell and Horseshoe Casino Baltimore, both of which opened in 2014, helped drive revenue. Renovations to the Linq hotel on the Strip contributed, too, as did “continued organic growth” in Caesars’ social and mobile games business and favorable year-over-year casino hold.
The company also said that various cost-saving initiatives generated an additional $350 million in earnings before interest, taxes, depreciation and amortization last year.
Hotel room renovations continue to be a major focus for the company. Caesars said that this year, it anticipates completing renovations for at least 4,800 rooms in Las Vegas and 5,700 owned or managed rooms across its business.
On the gambling side, CEO Mark Frissora again relayed his strong interest in new technology and capturing business from younger customers. He said the company has a two-part gaming strategy that entails “re-energizing” core slot customers as well as appealing to millennials and members of Generation X.
Frissora was light on specifics but he indicated that Caesars’ plans include introducing skill-based games in its casinos and challenging slot machine makers to create more innovative products. He also spoke about “evolving” casino floor design.
“With substantial modernization, we are attempting to create spaces that better integrate gaming and hospitality, and that maximize a group's ability to stay and play together,” Frissora said.
He did not take any questions about the restructuring of the CEOC division, which has been in bankruptcy court for more than a year now. But including financial results from that division, 2015 marked Caesars’ best year of operating results since 2007, according to Frissora.