Pinnacle Entertainment 4th-quarter loss narrows partly on reduced expenses

Pinnacle Entertainment 4th-quarter loss narrows

LAS VEGAS — Casino operator Pinnacle Entertainment Inc. said Friday that cost-cutting helped narrow its fourth-quarter loss from a year earlier, but it described the period as “tough” and announced several moves to trim costs further.

Pinnacle said in the statement announcing its fourth-quarter performance that it was abandoning plans for a $1.5 billion resort in Atlantic City on the former site of the Sands Casino Hotel, which it spectacularly imploded in 2007.

John Giovenco, Pinnacle’s interim chief executive officer, didn’t disclose the firm’s asking price for the site.

Gambling companies have faced pressure during the recession as consumers spend less on slot machines and table games and limit what they shell out for food, drinks and other add-ons that can be more profitable than games.

Pinnacle recorded fewer write-downs in the fourth quarter this year and cut its costs. But its loss, even excluding one-time items, was bigger than analysts expected, and its revenue was lower.

Pinnacle lost $242 million, or $4.03 per share, in the period that ended Dec. 31. That compares with a loss of $297.7 million, or $4.97 per share, a year earlier.

Excluding development costs and other one-time items, the company lost 39 cents per share. Analysts surveyed by Thomson Reuters, who typically exclude such items, forecast a smaller loss, 10 cents per share.

Pinnacle Entertainment owns and runs casinos in Nevada, Louisiana, Indiana, Missouri and Argentina. It hopes to push up the opening of its River City casino in the St. Louis, Mo., area next month.

The company also said Friday that it is selling an airplane and working to renegotiate debt that matures in December.

Pinnacle recorded $207 million in write-downs in the fourth quarter, compared with $313 million a year earlier.

Revenue fell 5 percent to $245 million for the quarter from $258.9 million a year earlier. Gambling, food and beverage, lodging, retail and entertainment revenue all fell. Analysts forecast revenue of $254.4 million.

The casino operator’s full-year loss shrank to $258.3 million, or $4.30 per share, from $322.6 million, or $5.38 per share, in 2008. Excluding one-time items, it lost 13 cents per share. Annual revenue was nearly flat at $1.05 billion.

The company’s stock shed 17 cents, or 2.3 percent, to $7.25 in morning trading.

“We’re evaluating our underperforming and non-strategic assets,” interim CEO Giovenco said in the statement.

Among other measures, he said the company has redesigned its Sugarcane Bay and Baton Rouge projects in Louisiana to cut $100 million from construction costs. In addition to putting the Atlantic City property up for sale, it also has cut corporate overhead, cut property marketing staff, hired new managers for Boomtown New Orleans and Lumiere Place and begun consolidating its three Las Vegas offices, Giovenco said.

The 19-acre site on Atlantic City’s famed Boardwalk cost Pinnacle $270 million in 2006. The company put plans to develop it on hold in late 2008 and wrote down the property’s value by $160 million in late 2009.