Station Casinos, the locals-oriented casino company whose Las Vegas area properties include Red Rock Resort, Green Valley Ranch and Palace Station, reported its second-quarter earnings today.
Company: Station Casinos LLC
Revenue: $337.8 million, up 5 percent from the second quarter of 2014.
Earnings: $29.8 million, compared with net income of $55.4 million in the second quarter of 2014. Last year, the company reported a $49.1 million gain on Native American development that it did not report this year. Adjusted earnings before factoring in certain costs were $114.9 million this year, up 10.1 percent from the second quarter last year.
What it means: Station’s Las Vegas operations did well in the second quarter, leading one of the company’s top executives to again point to healthy trends in the local economy.
Net revenue from the Las Vegas properties controlled by Station rose 4 percent year over year to $317 million, Chief Financial Officer Marc Falcone said on a conference call with analysts. He noted that the growth was widespread: Casino revenue increased 3.6 percent, food and beverage revenue grew 5.6 percent, and hotel revenue rose 8.2 percent.
Falcone highlighted a range of positive signals from the Las Vegas economy, including strong gaming revenue on the Strip (without considering baccarat), increased tourism figures and growth in key employment data.
“As a majority of our cash flows are generated in the Las Vegas market, we believe the continued improvement in these areas should bode well for further upside in our business,” Falcone said.
Station is also involved with the operations of two Native American casinos outside Las Vegas. Management fees from those properties rose 33 percent to $14.4 million in the second quarter.
Falcone said on the conference call that one of those properties, the Graton casino in Northern California, is in the process of refinancing some debt. If all goes according to plan, he said, interest savings would be “significant” and could produce a $5 million annual increase in management fees.
Station’s long-term debt at the end of the quarter was $2 billion.