Boyd Gaming says profitable quarter a result of stronger local economy

By Thomas Moore

Tuesday, Nov. 1, 2016 | 6:15 p.m.

Boyd Gaming is a leading diversified owner and operator of 22 gaming entertainment properties in Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana and Mississippi.

Company: Boyd Gaming Corp. (NYSE: BYD)

Revenue: $531.9 million, compared to $546.3 million in the third quarter last year.

Income: Income from continuing operations (net of tax) for the third quarter was $161.9 million, compared to $7 million in the third quarter last year.

Net income (which includes discontinued operations) was $342.6 million for the third quarter of 2016, compared to $25.4 million for the year-ago period.

Income per share: For continuing operations (net of tax) was $1.40 per share, compared to $0.06 per share in the third quarter last year.

Net income per share (which includes discontinued operations) was $2.97, compared to $0.22 per share for the same period a year ago.

What it means: Boyd Gaming completed the sale of its half of Borgata, Atlantic City’s top casino, to MGM Resorts International in August.

In a conference call with analysts about the results, Boyd executives were fairly confident about the company, noting issues for their properties in the Midwest and the South based on competition as well as flooding.

Keith Smith, president and chief executive officer of Boyd Gaming, said that in Las Vegas, the company is benefiting from “a local economy that continues to strengthen.” He talked bullishly about the opportunities from the Aliante casino, which Boyd bought last quarter and pending purchase of the Cannery Casino Resorts.

Smith and Josh Hirsberg, executive vice president and CFO, however, did have to answer more than a few questions about locals growth in Las Vegas from analysts on the call.

The questions were prompted by results that showed net revenues for the Las Vegas locals segment were up only slightly up at $148.9 million, from $148.0 million in the same quarter a year ago.

When it comes to Las Vegas locals, Boyd will “for the next nine or 12 months see growth in the 3 percent range and our market share and revenue growth in the same range,” Smith said.

Part of the reason revenue was flat — more in the 2 percent range — was because of “how we market and who we market to,” Smith said.

Hirsberg explained that the company had made a decision “not to go after or invest in certain customers,” implying that Boyd decided to focus on more profitable local customers.