Isle 2nd quarter earnings up; weak revenues lead to stock sell-off and 19 per cent drop in stock price

Isle of Capri Casino, Inc. officials reported second quarter earnings of $11.45 million (28 cents per share) Wednesday (12/2), but its stock got hammered as investors apparently were concerned with weak casino revenues, particularly at the company's St. Charles, Louisiana operation.

The Isle's stock lost more than 19 percent of its value, more than $3.70 per share, in morning trading after the company reported its second quarter numbers. The stock had more than doubled in value since the first of the year, from $8.45 per share January 1 to $21.43 per share November 5.

The Isle stock closed the day (12/2) at $16.12 per share, down $2.85 per share, a decline of just over 15 percent. The stock's trading volume for the day was more than 2 million shares, compared to its average daily volume of just over 373,000 shares.

For the quarter ended October 25, the Isle's casino revenue totaled $249 million, down slightly from $250 million during the same period a year ago. Gross revenues, which also include rooms and food/beverage revenues, fell nearly $4 million to $288.3 million. Offsetting that decline was a $5 million drop in promotional allowances, lower marketing expenses and lower interest expenses.

The company's St. Charles casino, now facing new competition, saw its net revenues fall $2.2 million (7 percent) for the quarter, compared to a year ago. The Golden Nugget Hotel and Casino opened in December 2014 and is having an impact on the Isle's market share. The new $700-million casino/hotel is owned by Fertitta Entertainment, Inc., run by Houston billionaire Tilman Fertitta.

In Iowa, the Isle's casinos in Bettendorf, Marquette and Waterloo had net revenues of $49.975 million for the quarter, compared to $46.872 million last year. Despite construction issues associated with the construction of a new land-based casino in Bettendorf and the new I-74 bridge near the casino, the riverboat casino had slightly higher net revenues during the second quarter, up $205,000 to $18.478 million.

CLICK HERE to download the company's second quarter financials.

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