Las Vegas Sun

July 16, 2019

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Boyd, noting a ‘solid quarter,’ talks steady success of locals market

Eastside Cannery

Steve Marcus

The Eastside Cannery on Boulder Highway.

Boyd Gaming, owner of such Las Vegas-area casinos as the California, Orleans and Sam’s Town, reported its second-quarter earnings today.

Company: Boyd Gaming Corp. (NYSE: BYD)

Revenue: Net revenues for the second quarter of 2017 were $599.9 million, an increase of 10.1 percent from $544.9 million for the same quarter last year.

Income: Income from continuing operations, net of tax, for the second quarter was $27.6 million, up from $11.3 million from the second quarter last year.

Income per share: Income per share was $0.24 for the second quarter of 2017 compared to $0.10 per share, for the second quarter of 2016.


In a conference call with investors on Thursday to discuss second-quarter earnings, Boyd executives said they were pleased with the company’s recent performance.

“In all, this was another solid quarter for the company,” said Boyd President and CEO Keith Smith. Boyd has seen good results in the Las Vegas locals market, which experienced “the strongest second-quarter EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) since 2008,” he said.

Smith said the locals market had been good for Boyd even before the company’s internal integration of the Aliante, Cannery and Eastside Cannery casinos, which Boyd purchased in 2016.

Construction at the California, a downtown Las Vegas property known for being popular with tourists from Hawaii, is one issue Boyd is facing.

Because of the renovation, management had to shut down a 300-room tower, which reduced room revenue by 40 percent in June. “We’ll continue until this project is complete in fourth quarter,” Smith said. “Once it’s complete, we expect the segment to return to growth.”

When asked about the trends in gaming revenues, CFO and Executive Vice President Josh Hirsberg said some of the decline came from changing consumer habits. But he also said Boyd has begun targeting different customers.

“I think the growth of gaming revenue has been slower, as we have anticipated,” Hirsberg said. “We have seen changes in how consumers are spending their money … and we are seeing a growth in nongaming revenues.”

“But some of it is a change of focus. We’re seeing revenues falling away in the lower-end segments, and we are seeing more profitability in higher end of our market. We’re not over-investing and not over-incentivizing, so you’ll naturally see a decline in gaming revenue. And we will naturally cycle through this and get back to an apples-to-apples comparison next year.”

One analyst asked the executives about recent casino sales in Las Vegas and if Boyd was looking to buy more casinos in Southern Nevada, possibly a reference to the recent sale of the SLS.

“We look at just about everything that’s available and out there,” Smith said. “We are pretty disciplined about what we move on. It has to be good quality and in an area of the market that we’re not already in.”

“We have looked at several assets on the Strip (and elsewhere in Las Vegas). And we would certainly be interested in increasing our exposure in Las Vegas with the right assets ... The fact that we didn’t move on the last one says we looked at it and it didn’t meet our objectives.”

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