A performance surge in its Midwest and South region, helped by the acquisition of five hotel-casinos, helped Boyd Gaming Corp. boost fourth-quarter revenue from a year earlier. But net profits fell from 2017, when a noncash income tax benefit boosted the total.
In a statement issued Thursday after stock markets closed, Boyd Gaming said its net income was $22.9 million, or 20 cents per share, for the three months ended Dec. 31, up from net income of $82.1 million, or 71 cents per share, a year earlier.
A $60.1 million noncash income tax benefit linked to the federal tax legislation figured in the 2017 total.
Adjusted earnings were $37 million, or 32 cents per share, matching the 32 cents-per-share forecast of analysts polled by Zacks Investment Research. Over the last four quarters, Boyd Gaming, which operates 29 casinos in 10 states, including 12 in Nevada, has surpassed consensus earnings-per-share estimates twice.
Year-earlier adjusted earnings were $25.5 million, or 22 cents per share.
“Boyd’s fourth quarter operating results were nothing short of sensational,” Stifel gaming analyst Steven Wieczynski told investors. “Boyd continues to check all of the boxes (regarding) what gets us excited in regional gaming today.”
Boyd Gaming’s fourth-quarter revenue was $791.6 million in the period, topping the $775.8 million forecast by Zacks-polled analysts. Revenue jumped 33 percent from $595.1 million a year earlier.
“Across the country, our customer remains healthy and willing to spend and our business is the strongest that it’s been in a decade,” Boyd CEO Keith Smith said in a conference call with reporters. “Nationwide, customer visitation and spending were solid throughout the fourth quarter, as 20 of our 24 properties posted same-store EBITDAR growth.”
Results for the latest quarter include $186.8 million in revenue and $48 million in adjusted earnings before interest, taxes, depreciation, amortization and rent from Ameristar Kansas City (Missouri), Ameristar St. Charles (Missouri) Belterra Resort (Indiana) and Belterra Park (Ohio), acquired Oct. 15; Pennsylvania-based Valley Forge Casino Resort, acquired Sept. 17; and slot machine route operator Lattner Entertainment (Illinois), acquired June 1.
The acquired properties pushed Boyd’s revenue in its Midwest and South segment to $501.8 million, up from $310.2 million. Adjusted EBITDAR, a cash flow measure that filters out nonrecurring costs, to $141.8 million from $86.3 million.
In its Las Vegas locals segment, Boyd Gaming’s fourth-quarter revenue rose 2.7 percent to $222.6 million from $219.8 million. Downtown Las Vegas casino revenue rose 3.4 percent to $67.3 million from $65.1 million.
Las Vegas locals casino EBITDAR was up 13.4 percent to $73 million from $63.4 million, which Smith said was the segment’s biggest growth since 2005. Several properties, including The Orleans, produced record results, he said.
Smith said his company stands to capitalize on Nevada’s strong economy.
The state population growth topped 2 percent in 2018, making it the nation’s fastest-growing state, Smith said. Furthermore, he added, job growth in Southern Nevada hit 3.4 percent and wages grew 6.5 percent.
“Across the Las Vegas Valley, the pool of potential customers continues to grow,” Smith said. “We remain optimistic about the long-term prospects of the business and confident that growth will continue.”
Looking beyond Nevada, Smith said work will start this year on the hotel-casino Boyd Gaming will develop and manage for the Wilton Rancheria tribe.
And, looking nationally, Smith expressed optimism about the growth potential for sports betting, which became legal beyond Nevada when the U.S. Supreme Court struck down a ban on the practice in May. Boyd Gaming offers sports betting in Nevada and Mississippi now and stands poised to offer it in 13 other states, Smith said.
Boyd Gaming’s partnership with Fanduel Group will pay off, Smith said. A Fanduel sportsbook will begin operating in Boyd Gaming’s Valley Forge property in March, in time for the NCAA men’s basketball tournament.
For the 12 months ended Dec. 31, net income was $115 million, or $1 per share, down from $189.4 million, or $1.64 per share. The prior-year tax benefit skewed results. Project development, preopening and write-down expenses for the full year 2018 also rose $31.2 million year to year.
Full-year revenue rose 9.6 percent to $2.63 billion $2.4 billion.
Boyd Gaming shares rose $1.12, or 3.96 percent, in after-hours trading Thursday to close at $29.40 at 5 p.m. PST.
Follow Matthew Crowley on Twitter @copyjockey
