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Gambling Stocks Roundup: CNTY & PNK Q1 Earnings in Focus, MGM Declares Share Buyback

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The Q1 earnings season is gradually nearing its end, with several gambling companies having reported their quarterly numbers. Last week, Century Casinos, Inc. (CNTY - Free Report) reported lower-than-expected first-quarter earnings, while Pinnacle Entertainment, Inc. (PNK - Free Report) posted an earnings beat. MGM Resorts International (MGM - Free Report) announced share repurchase program.

Recap of the Week’s Most Important Stories

Century Casinos Report Mixed Results

Century Casinos reported first-quarter 2018 adjusted earnings per share of 3 cents, missing the Zacks Consensus Estimate of 5 cents. The bottom-line figure also declined from the prior year-quarter earnings of 9 cents. However, net revenues came in at $40.6 million, which surpassed the consensus mark of $39 cents and increased 12% on a year-over-year basis.

Revenues from Canada were up 12% to $14.7 million, whereas the same from United States and Poland increased 3% and 20% to $7.7 million and $17.4 million, respectively. However, corporate and other revenues declined 28% year over year to $0.9 million.

Adjusted earnings before interests, taxes, depreciation and amortization (EBITDA) were down 2% year over year to $6.6 million. Moreover, this Zacks Rank #3 (Hold) company announced that its subsidiary, Century Resorts Management GmbH, purchased 50% of the outstanding common stock of Golden Hospitality Limited. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Pinnacle Entertainment Q1 Earnings Beat Estimates

Pinnacle Entertainment posted first-quarter 2018 adjusted earnings of 35 cents per share, outpacing the Zacks Consensus Estimate of 30 cents by 16.7%. The bottom-line figure compared favorably with the year-ago figure of 28 cents.

Net revenues of $628.4 million decreased 1.8% year over year due to adverse weather condition in winter. The reported figure, also, lagged the consensus mark of $640 million. While revenues from gaming were down year over year, the same increased in Food and beverage, Lodging as well as Retail, entertainment and other segments.

On a year-over-year basis, this Zacks Rank #3 company witnessed decline in revenues at the Midwest and the South segments. However, the same increased at the West segment.

Further, Penn National Gaming has received go-ahead signal from The Illinois Gaming Board for the acquisition of Pinnacle Entertainment. The deal is likely to be sealed in the second half of 2018.

MGM Resorts Announces Share Buyback Program

MGM Resorts’ board of directors announced a new share buyback program of $2 billion. The company also said that it had completed the previously declared $1.0 billion share repurchase program.

Moreover, the company has a strong balance sheet. MGM Resorts ended the quarter with cash and cash equivalents of $1.52 billion as of Mar 31, 2018 compared with $1.49 billion as of Dec 31, 2017.

On Apr 25, 2018, MGM Resorts’ board of directors approved a quarterly dividend of 12 cents per share, totaling $67 million. The dividend will be payable on Jun 15, 2018 to shareholders of record as of Jun 8, 2018. During the first quarter, MGM Resorts repurchased 10 million shares of its common stock at $36.24 per share for a total aggregate amount of $362.4 million.

MGM Resorts has a Zacks Rank #5 (Strong Sell).

Price Performance

The following table shows the price movement of the major gambling stocks in the past week and the last six months: 

In the last five trading sessions, share price movement of most of major gambling stocks witnessed a positive trend. Shares of Century Casinos, Penn National Gaming and Boyd Gaming Corporation (BYD - Free Report) have rallied significantly in the same time frame.

Also, key sector participants like Pinnacle Entertainment, Wynn Resorts Melco Resorts, and Las Vegas Sands Corp. (LVS - Free Report) were the major gainers in the past six months.

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