Harrah´s Entertainment Posts Solid Financial Results

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Created on Monday, 27 July 2009 16:20

Most casino stocks and shares, particularly land based companies, have taken a hammering over the past 6 moths thanks to the drop in business as a result of the credit crunch and the onslaught from online casinos (not to mention the increasing competition in the sector). Could this be the market bottom?

If you were thinking if gambling on some casinos shares, and were trying to call the end of the Bull Run, now could be a good time to investigate the potential, based on a mixed bag of indicators from Harrah´s.

Harrah's Entertainment, one of the Las Vegas Big Boys finished their Q2 ahead of expectations, thanks to a cost-cutting drive and strong results from the company's activities outside Las Vegas and Atlantic City.

The company paid down its debt by almost $4 billion and raised more cash for liquidity.

The gaming concern reported $24.1 billion in long-term debt at the end of Q1, a figure that has yet to be updated for Q2.

However, they are not out of the woods yet- the company still saw its operating income fall because of the declining Las Vegas economy, which accounts for 31 % of its revenues.

Harrah's which owns 53 casinos across the globe, had income of $6.3 million for the second quarter down from $323.1 million in Q2 2008, due to a $297 million charge of goodwill due to the ongoing impact of the crisis on the company's Las Vegas casinos & hotels.
Revenues were down 12.7 percent, from $2.6 billion in Q2 2008 to $2.27 billion for Q2 2009. The cash flow for Q2 also eased back  11% to $565.6 million from $634.3 million in 2008.

In a brighter note, hotel occupancy was 95 percent between April and June.

Harrah´s Entertainment owns and runs Las Vegas casinos Caesars Palace, Paris Las Vegas, Bally's, Bill's, Flamingo, Imperial Palace, Harrah's Las Vegas and Rio.

They also have businesses in the Atlantic City area, including 4 casinos in New Jersey and one in Pennsylvania.