Caesars Entertainment 1st-quarter loss narrows

AP News
Posted: May 10, 2011 4:55 PM
Caesars Entertainment 1st-quarter loss narrows

Caesars Entertainment Corp.'s first-quarter loss shrank compared with a year earlier as it cuts its marketing costs and enjoyed a hefty one-time gain for paying off debt early and its revenue rose slightly in Las Vegas, the company said Tuesday.

The world's biggest casino operator, which is privately held, said it lost $147.5 million for the period that ended March 31, including a gain of $21 million related to paying off debt early. That's compared with a loss of $195.6 million a year earlier, including a loss of $30.2 million that also was tied to paying off debt early.

Caesars' overall revenue dipped 1 percent to $2.18 billion as frequent players visited less often and it temporarily closed four properties in Illinois and Indiana because of flooding and other weather-related problems. The company changed its name from Harrah's Entertainment in November.

CEO Gary Loveman said the marketing cuts don't indicate the company wants to stop offering casino freebies and or doing other direct marketing that encourages customers to gamble.

"The trick in this is to see exactly what motivates behavior and what simply is margin-reducing baggage on top of (whatever) drives the customer to the facility," Loveman told industry analysts on a conference call.

The company said that while gamblers are taking fewer trips, they are spending slightly more when they do visit casinos. Caesars said the number of trips by players using its loyalty program decreased 8 percent compared with one year ago, while spending per trip increased 3.7 percent.

Caesars anticipates the temporary closings will be immaterial to its full-year results after accounting for insurance coverage.

Andrew Zarnett, an analyst with Deutsche Bank Securities, told investors the results were largely in line with his expectations.

The company also said Tuesday that Atlantic City, N.J., is showing signs of stabilizing with a relatively small decline of 1.8 percent from a year earlier. To build on the 6.4 percent increase in its Las Vegas business, Caesars said has decided to finish the Octavius tower at Caesars Palace and is starting work on a Las Vegas retail, dining and entertainment project.

Caesars owns nine casinos in Las Vegas and four in Atlantic City. It also owns or manages casinos in Illinois, Indiana, Iowa, Missouri, Louisiana, Arizona, North Carolina and Pennsylvania.

The company withdrew plans for an initial public offering in November when it saw it couldn't get the opening price it wanted for its shares.

Caesars reports its financial results because it has significant publicly traded debt. As of March 31, it said, its total long-term debt was $18.65 billion, and it had $880.5 million in cash and cash equivalents.


AP Business Writer Michelle Chapman contributed reporting from New York.

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