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Penn National (PENN) Q4 Earnings Lag Estimates, Rise Y/Y

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Penn National Gaming, Inc. (PENN - Free Report) reported mixed fourth-quarter 2021 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. However, the top and the bottom line increased on a year-over-year basis. Following the results, the company’s shares dropped 0.7% during trading hours on Feb 3.

The company witnessed strong property level performance across all the segments on account of its omni-channel strength, technological investments and improvement in marketing capabilities. Also, solid contributions from its Barstool-branded retail sportsbooks added to the positives. Going forward, the company intends to integrate Barstool Sportsbook into theScore media app to boost customer acquisition prospects and drive growth.

In this regard, Jay Snowden, president and CEO, stated, “We remain encouraged by the ongoing visitation from younger demographics and are focused on reimagining our properties and offerings to enhance the entertainment appeal to this steadily growing segment of consumers.”

Earnings & Revenue Discussion

In the quarter under review, adjusted earnings of 26 cents per share missed the Zacks Consensus Estimate of 46 cents by 43.5%. However, the bottom line increased significantly from adjusted earnings per share (EPS) of 7 cents reported in the prior-year quarter.

Penn National Gaming, Inc. Price, Consensus and EPS Surprise

 

Penn National Gaming, Inc. Price, Consensus and EPS Surprise

Penn National Gaming, Inc. price-consensus-eps-surprise-chart | Penn National Gaming, Inc. Quote

 

Net revenues totaled $1,572.5 million, beating the consensus mark of $1,518 million and surged 53.1% from the year-ago quarter’s level.

The Northeast segment delivered revenues of $656.6 million, up 39.5% year over year. The South, West, Midwest, Interactive and Other segments’ revenues were $339.9 million, $138.7 million, $287.5 million, $157.6 million and $3.8 million, up 36.4%, 74.5%, 52.8%, 199.6% and 375% year over year, respectively.

Operating Headlines

During the fourth quarter, adjusted EBITDAR rose 31.5% from the year-ago quarter’s level to $480.5 million. Adjusted EBITDAR margin, however, contracted 500 basis points to 30.6% from 35.6% a year ago.

Other Financial Information

As of Dec 31, 2021, the company had cash and cash equivalents of $1,863.9 million compared with $1,853.8 million as of Dec 31, 2020. Bank debt as of Dec 31, 2021, was $1,563.7 million, down from $1,628.1 million at 2020 end.

On Feb 1, 2022, the company approved a new share repurchase program worth $750 million to boost stockholders’ value. The initiative was a testament to the company’s long-term growth prospects and balanced approach in allocating capital to growth investments and offset dilution from stock-based compensation and other equity grants. The company stated the maturity of the program on Jan 31, 2025.

2021 Highlights

Total revenues in 2021 came in at $5,905 million compared with $3,578.7 million in 2020.

General and administrative expenses in 2021 came in at $1,352.9 million compared with $1,130.8 million in 2020.

In 2021, diluted EPS came in at $2.48 per share against ($5.00) reported in the previous year.

2022 Guidance

For 2022, the company anticipates net revenues in the range of $6.07-$6.39 billion. Adjusted EBITDAR for 2022 is expected in the range of $1.85-$1.95 billion.

Zacks Rank & Key Picks

Penn National currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks from the Zacks Consumer Discretionary sector are Crocs, Inc. (CROX - Free Report) , RCI Hospitality Holdings, Inc. (RICK - Free Report) and JAKKS Pacific, Inc. (JAKK - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Crocs flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 41.6%, on average. Shares of Crocs have increased 31.7% in the past year.

The Zacks Consensus Estimate for CROX’s 2022 sales and EPS indicates a rise of 48.7% and 23.2%, respectively, from the year-ago period’s levels.

RCI Hospitality flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 67.7%, on average. Shares of RCI Hospitality have surged 40.3% in the past year.

The Zacks Consensus Estimate for RICK’s 2022 sales and EPS suggests growth of 33.7% and 18.9%, respectively, from the year-ago period’s levels.

JAKKS Pacific flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 48.9%, on average. Shares of JAKKS Pacific have increased 9.9% in the past year.

The Zacks Consensus Estimate for JAKK’s 2022 sales and EPS suggests growth of 4.9% and 227.8%, respectively, from the year-ago period’s levels.