Circus Circus reports higher net income

Circus Circus Enterprises Inc. said improved results at some Nevada casinos helped boost net income for the quarter and year ended Jan. 31.

Circus reported net income of $14.6 million, or 16 cents a share, on revenue of $355.7 million for the fiscal fourth quarter. The per-share figure was 3 cents higher than analysts' consensus estimate for the latest quarter.

In the year-ago quarter, 8 cents a share of expenses related to the expansion of a Tunica County casino and resignation of the company's chairman cut income to $708,000, or 1 cent a share, on revenue of $325.2 million.

For the full year, net income declined to $85.2 million, or 90 cents a share, from $89.9 million, or 94 cents fully dilute. Revenue rose to $1.48 billion in fiscal 1999 from $1.35 billion, Circus said.

Operating cash flow at the Luxor in Las Vegas rose to $23.9 million in the fourth quarter from $20.5 million in the year-ago period, Circus said. Cash flow at Circus Circus Las Vegas was up $2 million, to $11.7 million, while the numbers at Circus' Reno and Laughlin properties were also higher.

Cash flow at the Excalibur and 50 percent-owned Monte Carlo dipped slightly, while bad weather and higher tax rates contributed to a cash-flow decline at the Grand Victoria joint venture in Elgin, Ill. In Tunica County, cash flow more than doubled, Circus said.

"I think it's very significant that Luxor has begun to re-contribute in a big way, both from an occupancy and room rate, to drive higher cash flow," said Andrew Zarnett of Ladenburg Thalmann & Co.

"The revamping of that property has been able to bring in new customers and repeat customers, and that shows Circus is on the right track."

The Luxor turnaround also bodes well for the company's new $950 million resort, Mandalay Bay, which opens Tuesday. The new project's location south of Luxor has raised concerns among some analysts about its distance from the Strip's epicenter further north.

Luxor's performance may enhance Mandalay Bay's ability to attract a critical mass of visitors to the three Circus resorts south of Tropicana Avenue.

Circus stock, which had climbed sharply over the past week on reports of strong visitor volume in Las Vegas, slipped 37.5 cents in Tuesday trading, closing at $17.125 a share before the earnings report was released.

Other gaming stocks also gave up some of their recent gains, with operators such as Mirage Resorts, MGM Grand, Harrah's Entertainment, Stations Casinos, Boyd Gaming and Park Place Entertainment all closing lower.

The shares of several slot manufacturers also finished lower as reports circulated of legislation aimed at banning revenue-participation games in Nevada.

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