Winter storms hamper Eldorado Resorts’ 1st quarter results

Unusually harsh winter weather prevented regional gaming powerhouse Eldorado Resorts Inc. from meeting analysts’ first-quarter revenue projections, the company reported Thursday.

The CEO of Reno-based Eldorado also declined to speak specifically about whether his company, reported as a possible suitor for Caesars Entertainment Corp., would make a play for the company.

“I’d note that similar to our prior quarter call, we read the same newspaper that you read so we read the same rumors about what we might or might not be doing,” Eldorado CEO Thomas Reeg said in a conference call with investors. “We’re not going to comment on any particular potential transaction. We would reiterate that if you see potential targets that may become available that seem like they would fit our skill set, you should anticipate that we would take a hard look.”

Reeg also said the weather wasn’t kind to Eldorado during the quarter that ended March 31, especially for the company’s flagship Reno properties.

Reeg explained that sometimes bad weather results in pent-up demand that results in even higher demand that is met with more play once better weather returns. But in Reno in February and March, primary highways over the Sierra Nevada to Northern California kept closing over a six-week span.

“The first quarter is typically my least favorite to talk about because invariably the conversation turns to weather, and this one was no exception,” Reeg said. “I’ve heard enough about bomb cyclones and polar vortexes to last me for quite some time.”

Still, revenue increased 44.4 percent in the quarter, thanks primarily to revenue boosts from acquisitions Eldorado has made in the past year, the largest of which was its $1.85 billion acquisition of Tropicana Entertainment Inc. in October that gave the company a foothold in the Atlantic City market. Tropicana Entertainment is not affiliated with the Strip property with that name.

An average from a survey of Wall Street analysts anticipated Eldorado would report revenue of $660.9 million. It ended up capturing $635.8 million during the quarter.

Reeg indicated the experience of entering the Atlantic City market with the Tropicana acquisition has given the company confidence that it could be a player in Las Vegas, one of the reasons why Eldorado is often mentioned in comments about possible purchases of Caesars or The Cosmopolitan of Las Vegas.

Reeg said the company has most of its experience in Reno, which he finds similar to Atlantic City and Las Vegas in terms of the types of customers it attracts.

“We saw all the hand-wringing about getting into Atlantic City and how competitive it is, and we wrung our hands ourselves a bit in terms of whether this is somewhere we want to go,” Reeg said. “Our early experience has been strong in terms of our own performance, the property that we purchased, the management team we inherited and the opportunity we see to do the sorts of things that we have done in terms of improving property. We see a ton of upside in Atlantic City and as I said, we’ve just started pulling levers we typically pull.”

Eldorado shares were up 51 cents, 1.1 percent, to $48.34 a share on trading about 1½ times normal volume on the Nasdaq exchange on Thursday. After hours, the issue fell 44 cents, about 1 percent, to end at $47.90 a share.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.