Station Casinos reports a profit, Rio earnings down

Four Las Vegas gaming operators reported mixed second-quarter results, citing increased competitive pressures and low win percentages.

Rio Hotel & Casino Inc. of Las Vegas posted lower earnings for the quarter ended June 30, while Station Casinos Inc. of Las Vegas reported a turnaround from a year-ago loss despite costs related to an acquisition attempt and Missouri legal issues.

Primadonna Resorts Inc. of Primm and Aztar Corp. of Phoenix said second-quarter earnings were hurt by declining business in their casinos at the corners of the Las Vegas Strip and Tropicana Boulevard.

Rio posted second-quarter net income of $4.5 million, or 18 cents a share, down from $6.6 million, or 31 cents a share, in the 1997 period, when there were 16.7 percent fewer shares outstanding. Revenue was $98.1 million versus $97.2 million, Rio said.

Rio Chairman Tony Marnell said the all-suites hotel recorded an average 95 percent occupancy rate at an average daily price of $97 for the latest quarter.

Rio's gaming volume was up 23 percent, but a lower-than-average table game win percentage affected results, he said. Cash flow, or earnings before interest, taxes, depreciation and amortization, slipped to $20.1 million from $24.5 million, he said.

Station reported second-quarter net income of $1.5 million, or 4 cents a share, compared with a $10.1 million net loss in the 1997 quarter. Revenue rose to $206.3 million from $173.5 million.

Adjusted cash flow rose to $48.1 million from $35.5 million, said Station, which has agreed to be acquired by the real estate investment trust Crescent Real Estate Equities.

The company said the latest results reflect a full quarter of operation for Sunset Station, which opened June 10, 1997, as well as $1.3 million of expenses associated with its attempt to acquire Arizona Charlie's and legal costs incurred in Missouri.

Station also said it believes property damage and business interruption insurance policies will offset any losses associated with the storm damage it incurred this week at Palace Station.

Primadonna, which owns 50 percent of New York-New York, reported a 35 percent plunge in per-share net income; while Aztar Corp. reported a slight earnings increase despite lower results at its Tropicana hotel-casino here.

MGM Grand Inc., whose flagship 5,005-room resort and 50-percent stake in New York-New York make it the dominant operator in the Strip-Tropicana corridor, postponed today's scheduled earnings release until Friday, citing a scheduling conflict.

Primadonna, though, said second-quarter net income fell to $6.8 million, or 24 cents per diluted share, from $10.9 million, or 37 cents per diluted share, in the 1997 second period. Revenue fell to $71.3 million from $75.6 million.

Second-quarter operating cash flow fell to $25.3 million from $29.8 million in the year-ago quarter, Primadonna said.

The company said cash flow at its Primm, Nev., properties on I-15 at the California-Nevada border rose 5 percent, fueled by higher casino revenue, a greater number of paying overnight guests and more play at the Primm Valley Golf Club.

But its share of operating income from New York-New York fell to $9.5 million from $14.8 million in the 1997 second quarter, Primadonna Chairman Gary Primm said. MGM and Primm split New York-New York's profits.

"The softening in New York-New York's performance is a function of favorable results in its inaugural year and recent overall declines in the Southern Nevada gaming market," he said.

Primm said the company increased its bank credit line to $350 million from $50 million to gain "the flexibility needed to pursue opportunities to enhance shareholder value."

He also said the opening of the Fashion Outlet of Las Vegas at Primm earlier this month should generate enough business at the border resort area to help boost revenue and cash flow for the rest of the year.

Aztar said improved results in Atlantic City and at its Midwest riverboat operations helped second-quarter net income edge slightly higher, to $3.7 million, or 8 cents per diluted share, from $3.4 million, or 7 cents per diluted share, in the 1997 second period. Revenue rose to $203.2 million from $200.4 million.

Aztar Chairman Paul Rubeli said operating cash flow at the Atlantic City Tropicana rose 11 percent, to $23.2 million, during the latest quarter, its seventh consecutive three-month period of cash flow increases.

Aztar's Missouri and Indiana riverboats also posted higher cash flow, but its Las Vegas and Laughlin casinos saw a decline in business due to increased competition. Aztar is studying how it can redevelop the underperforming Las Vegas Tropicana.

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