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Red Rock (RRR) Q4 Earnings Beat Estimates, Revenues Miss

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Red Rock Resorts, Inc. RRR reported mixed fourth-quarter 2019 financial numbers, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. The bottom line surpassed the consensus mark for the second straight quarter, while revenues missed the same for second consecutive quarter.

Th company reported adjusted earnings of 18 cents per share, which beat the Zacks Consensus Estimate of 11 cents. However, the reported figure declined from the year-ago quarter’s earnings of 30 cents by 40%.

Revenues during the quarter totaled $460.8 million, which missed the consensus mark of $463 million. However, the top line improved 6.8% 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 $255.8 million, up 6.2% year over year. Food and beverage revenues increased 9.8% year over year to $110.8 million. Other revenues declined 3.4% on a year-over-year basis to $26.1 million. Room revenues increased 10.9% year over year to $46.8 million. Management fees revenues rose 3.9% to $21.3 million.

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


Segmental Details

Las Vegas Operations: Revenues in this segment totaled $437.9 million, up 6.9% year over year. This uptick can be attributed to higher revenues from the Palms Casino Resort. However, Adjusted EBITDA increased to $125.5 million by 3.7% on a year-over-year basis. The segment’s adjusted EBITDA margin contracted 89 basis points to 28.6%.

Native American Management: Revenues in the segment increased 3.9% to $21.2 million. Meanwhile, adjusted EBITDA increased to $19.9 million from $19.1 million owing to rise in management fees generated under the Graton Resort management agreement.

Other Financial Details

As of Dec 31, 2019, Red Rock had cash and cash equivalent of $128.8 million. Outstanding debt at the end of the reported quarter was $3.076 billion. The company declared a quarterly cash dividend of 10 cents payable on Mar 27, 2020 to shareholders of record as of Mar 13, 2020.

Zacks Rank & Other Key Picks

Currently, Red Rock, which shares space with Boyd Gaming Corporation BYD, carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other stocks, which warrant a look in the same space include Churchill Downs Incorporated CHDN and Caesars Entertainment Corporation (CZR - Free Report) . Both the stocks carry the same rank as Red Rock.

Churchill Downs and Caesars Entertainment has an impressive long-term earnings growth rate of 20% and 10%, respectively.

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