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Red Rock (RRR) Q3 Earnings Beat Estimates, Revenues Miss

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Red Rock Resorts, Inc. RRR reported mixed third-quarter 2019 financial numbers, with earnings surpassing the Zacks Consensus Estimate and revenues missing the same.

The company reported adjusted earnings of 15 cents per share, which beat the Zacks Consensus Estimate of 11 cents by 36.4%. However, the reported figure fell from the year-ago quarter’s earnings of 20 cents by 25%.

Revenues during the quarter totaled $465.9 million, which missed the consensus mark of $469.7 million by 0.8%. However, the top line increased 13% year over year. The uptick can primarily be attributed to a year-over-year rise in Las Vegas operations.

Casino revenues in the quarter amounted to $238.3 million, up 3.3% year over year. Food and beverage revenues increased 35.2% year over year to $128 million. Other revenues rose 5.5% on a year-over-year basis to $27.8 million. Also, room revenues increased 22.5% year over year to $48.2 million. Management fees revenues rose 11% to $23.6 million.

Red Rock Resorts, Inc. Price, Consensus and EPS Surprise



Segmental Details

Las Vegas Operations: Revenues in this segment totaled $440.7 million, up 13.1% year over year. This uptick can be attributed to higher revenues from the Palms Casino Resort. However, Adjusted EBITDA declined to $97.2 million by 0.8% on a year-over-year basis. The segment’s adjusted EBITDA margin contracted 290 basis points to 20.9%.

Native American Management: Revenues in the segment increased 11.1% to $23.5 million. Meanwhile, adjusted EBITDA increased to $22.3 million from $19.8 million owing to rise in management fees generated under the Graton Resort management agreement.  

Other Financial Details

As of Sep 30, 2019, Red Rock Resorts had cash and cash equivalent of $106.4 million. Outstanding debt at the end of the reported quarter was $3.095 billion. The company declared a quarterly cash dividend of 10 cents payable on Dec 27, 2019 to its shareholder of record as of Dec 13, 2019.

Zacks Rank & Stocks to Consider

Currently, Red Rock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the Zacks Consumer Discretionary sector include Melco Resorts & Entertainment Limited MLCO, Zynga Inc (ZNGA - Free Report) and TEGNA Inc TGNA all carrying a Zacks Rank #2 (Buy).

Melco, Zynga and TEGNA have long-term earnings growth rate of 21.3%, 13.9% and 10%, respectively.

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