Caesars CEO Talks Up Sports Betting After Profit Falls Short
(Bloomberg) -- Caesars Entertainment Inc. would have been more profitable last quarter if not for the fallout from Hurricane Ida on the U.S. Gulf Coast and a fire in Northern California, Chief Executive Officer Tom Reeg said Tuesday.
Absent those interruptions, the largest owner of casinos in the U.S. would have generated $1.1 billion in third-quarter earnings before interest, taxes, depreciation and amortization from its resorts, Reeg said on a conference call Tuesday. In May, he said the company would likely earn $1 billion in Ebitda at least one quarter this year.
Instead, Caesars reported a surprise net loss for the quarter of $233 million, or $1.10 a share. Revenue soared to $2.69 billion from $1.44 billion a year ago, when casinos were in the teeth of the pandemic.
Adjusted earnings before interest, taxes, depreciation and amortization more than doubled to $882 million, but that missed the $931 million average of analysts’ estimates compiled by Bloomberg. The earnings represent a record for the company’s Las Vegas properties, Caesars said in a statement.
Shares of Caesars were down 2.2% to $109.25 in extended trading. The stock was up 50% this year through Tuesday’s close in New York.
Online betting has been a big growth initiative for the casino industry, including Caesars.
The company completed the acquisition of sports betting giant William Hill Plc in April. Results for its online business were impacted by increased promotional activity, executives said on the call. While the company will continue to invest in the business, Reeg forecast profitability in sports betting by football season 2023.
“We’re gaining share at a pace stronger than we expected given the investment that we’ve made,” he said.
Caesars’ CEO also reiterated plans to sell a casino on the Las Vegas Strip early next year to reduce debt.
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