Caesars Entertainment narrowed its losses during the first quarter but still saw revenue fall 2.9 percent, from $2.21 billion to $2.14 billion, and experienced a net loss of $216.7 million.
The company, which operates 13 Nevada casinos, including eight in Las Vegas that are open and a ninth that's being renovated, said income from its Nevada properties fell 13.2 percent, while revenue was off 2.6 percent.
Executives reported a net loss of $1.74 a share. During the same quarter last year, the company reported a net loss of $2.24 a share, or $281.1 million.
Caesars is the world’s most geographically diverse casino company. It operates commercial and tribal casinos, racinos and riverboats in 13 states and a Canadian province and on three continents.
“Despite some positive signals in the U.S. economy, including a strengthening housing market and improving labor market, consumer spending has remained somewhat tepid,” Caesars CEO Gary Loveman said in a conference call today. “The economic environment has continued to impact domestic gaming results and during the first quarter, we saw declines in overall visitation to our properties.”
Chief Financial Officer Donald Colvin said casino and room revenue declines were partially offset by the company’s food and beverage division. But he said Project Linq-related construction activities resulted in a decline in revenue estimated at $10 million to $13 million. The company’s Flamingo and Quad properties were most directly affected by the construction.
In addition, the company’s Bill’s Gamblin’ Hall property on the Las Vegas Strip closed for renovation in February and will reopen as Gansevoort Las Vegas with the first phase due in December.
Executives also said the company’s four Atlantic City casinos and its Philadelphia property were affected by the region’s continued slow recovery from Hurricane Sandy in the fourth quarter.
Loveman said the company’s investment in Las Vegas food and beverage and hotel rooms is trending up.
“The Nobu Tower and Restaurant, which opened in February (at Caesars Palace), has performed well to date with strong average daily room and occupancy rates increasing,” Loveman said.
He added that the Bacchanal Buffet, which opened at Caesars in September, is outperforming expectations and is on pace to generate $40 million of revenue in 2013, three times as much as the previous buffet.
The company also is expecting the growth of Internet poker play to help the company in the long run.
Caesars is partnering with an experienced European system provider, 888 Holdings, to produce its World Series of Poker site, expected to go live by the end of the year.
Loveman also said a company management restructuring would strengthen its balance sheet. Last month, the company’s board of directors announced the formation of Caesars Growth Partners, which will own the company’s stake in Caesars Interactive, Planet Hollywood and its joint-venture interests in the Horseshoe Baltimore.
“I am optimistic that the transaction will further strengthen our ability to fuel growth and create value,” Loveman said. “We have worked hard to establish a solid foundation for value creation in the business and are now transitioning into the realization phase for many of the projects in our pipeline with several others on the horizon.”