Last week casino operator Caesars Entertainment Corp announced that its loss grew in the second quarter which were mainly attributed to large charges related to land costs in Macau.
After the announcement the company’s shares dropped by more than 3% in aftermarket trading. Caesars loss grew to $241.7 million ($1.93 per share) in the three months ending June 30th, in the same period last year there was a loss of $155.5 million ($1.24 per share).
This was a far greater loss than analysts were expecting, they had predicted a loss of 82 cents per share.
These results include $134 million in non-cash charges including £101 million resulting from a land concession in Macau. As a result Caesars’ income dropped by almost 65% to $81.8 million. Over all the company’s revenue did rise by 2% up to $2.17 billion.
The revenue was lifted by growth in Caesars’ international and online operations which helped offset lower casino revenues in the U.S., particularly in Atlantic City.
Caesars’ chairman, chief executive and president, Gary Loveman, said that “After a strong first quarter, difficult economic conditions led to lower visitation in several regions, impacting our core operating results in the second quarter
There were 1.6% less visitors to Caesars’ casinos during the period compared to last year and spending all dropped by 1.9%.
Caesars shares have gradually been dropping since their massive IPO. The company has $19.9 billion of long-term debt and overall its stock has dropped almost 46% since going public on February 8th.
While most casino operators are suffering, Caesars is doing worse than most. Las Vegas Sands saw a drop just under 10% in the last month and Wynn is down about 5%. This compares to a 25% drop in Caesars’ share value.