Golden Entertainment posts loss, misses Wall Street forecasts, but touts progressMatthew Crowley, CDC Gaming Reports · November 9, 2018 at 8:28 amGolden Entertainment focused on progress during its third-quarter earnings announcement Thursday.The company said the acquisition of two Laughlin casinos was on track to close in early 2019, the same time major renovations of its Stratosphere would finish. But the quarterly numbers weren’t as sunny.The company reported a net loss for the quarter, reversing year-earlier income, and missed Wall Street forecasts. Its revenue forecasts also missed.In a statement, Golden Entertainment – which owns hotel-casinos in Southern Nevada and Maryland and slot routes in Nevada and Montana – said its net loss was $3.1 million, or 11 cents per share, for the three months ended Sept. 30, reversing year-earlier net income of $8.6 million, or 36 cents per diluted share.Analysts polled by Zacks Investment Research had, on average, expected Golden Entertainment to earn 15 cents per share. Golden Entertainment has now missed earnings-per-share forecasts for four straight quarters, the firm said.Revenue nearly doubled to $210.3 million from $107.7 million, but fell short of the $215 million in earnings Zacks-polled analysts had forecast.Adjusted earnings before income, taxes, depreciation and amortization, a cash flow measure that excludes nonrecurring items, more than doubled, to $38.1 million from $15.1 million.“Despite strong performances from our Laughlin and Las Vegas locals properties, we experienced a challenging third quarter, primarily due to weaker-than-expected results at the Stratosphere and at chain store locations in our Nevada-distributed gaming business,” CEO Blake Sartini said in a statement.In a conference call Thursday, Sartini went further, saying Strip market softness and construction disruptions related to the Stratosphere upgrade, particularly room makeovers in July and August, dampened the hotel-casino’s occupancy. He also said that the Strat Café, one of the hotel-casino’s busiest food and beverage outlets, was closed all of September.Nevertheless, Sartini foresaw upside. The Stratosphere upgrade, which started in May and includes a makeover of 750 rooms and the opening of a new sports book, lounge, and tap room, is projected to finish in 2019’s first quarter. The $190 million deal for the Edgewater and Colorado Belle Resorts in Laughlin, announced in May, is also expected to close then.Sartini expressed faith in Las Vegas’ market, noting the city’s 42 million expected visitors and its ongoing strong economy, marked by higher wages and consumer spending.As a show of confidence in the company’s strength, Golden Entertainment said it will buy back $25 million shares of common stock.“We currently see no signs that Las Vegas is losing its place as the leading destination for leisure and convention travel,” Sartini said.Beyond property acquisitions and renovations, Golden Entertainment poised itself to capitalize on expanded sports betting. On Oct. 3, Golden Entertainment entered a long-term agreement to have William Hill manage Golden’s race and sports operations in Nevada, Maryland and Montana. Financial terms weren’t disclosed.The expanded deal will also have William Hill manage sports books at the Aquarius in Laughlin and the Stratosphere, Arizona Charlie’s Boulder and Arizona Charlie’s Decatur in Las Vegas and at the Edgewater and Colorado Belle.William Hill had already operated the race and sports book at the Pahrump Nugget, as well as deposit kiosks at 80 Golden Entertainment-owned taverns and third-party distributed gaming locations in Nevada.Golden Entertainment said it will pursue sports wagering opportunities in Montana and Maryland together if the states legalize it.On Oct. 11, Deutsche Bank analyst Danny Valoy, who rates Golden Entertainment “buy,” expressed optimism about the casino company’s gap-to-market opportunity.In an investors note released on Seeking Alpha, Valoy said Golden’s revenue per available room was about 40 percent below the Las Vegas market’s and 50 percent below the Strip’s and could yield “significant EBITDA growth in time.”Golden Entertainment shares rose 39 cents, or 2.25 percent, Thursday to close at $17.69. The share price has fallen 45.1 percent in 2018.Follow Matthew Crowley on Twitter @copyjockey.