Harrah's Entertainment Inc., the world's largest casino company by revenue, said Tuesday it swung to a fourth-quarter profit from a year-ago loss that included hurricane-related costs and write-offs for planned property sales.
Harrah's is being purchased by a group including Texas Pacific Group and Apollo Management for $17.1 billion. Its board approved the deal in December and CEO Gary Loveman said Tuesday the shareholder vote has been set for April 5 in Las Vegas.
"We continue to work toward closing this transaction," Loveman said in a conference call with analysts.
The company posted net income of $47.6 million, or 25 cents per share, for the three months ended Dec. 31 compared with a loss of $142.2 million, or 78 cents per share, during the same period a year ago.
However, adjusted earnings from continuing operations dropped to $85.3 million, or 45 cents per share, from $143.4 million, or 77 cents per share, last year.
Analysts polled by Thomson Financial were expecting a profit of 64 cents per share.
Revenue increased 16 percent to $2.43 billion versus $2.1 billion, topping Wall Street's consensus estimate of $2.29 billion. Same-store sales, or sales at stores open at least a year, climbed 6.8 percent. The comparison excludes properties closed in the prior-year period due to hurricane damage sustained in the third quarter of 2005.
For the year, the company earned $535.8 million, or $2.85 per share, compared with $236.4 million, or $1.57 per share, in 2005. For the year, revenue rose to $9.67 billion from $7.01 billion.
The buyout offer is $90 a share. Harrah's shares fell 34 to $84.58 in midday trading on the New York Stock Exchange.
"We continue to think that Harrah's shares will trade around the buyout agreement at $90 per share rather than on earnings results," Goldman Sachs analyst Steven Kent said in a note to investors.
The company's properties in Las Vegas made an "exceptionally strong showing," Loveman said, where revenue for the quarter rose to $825.8 million from $715 million. Yearly revenue jumped to nearly $3.3 billion, up from $1.9 billion.
The Atlantic City market also posted revenue gains, despite increased competition in the region, the company said. Revenue for the quarter rose to $500 million from $481 million. For the year, revenue totaled $2 billion, up from $1.48 billion.
In the Gulf Coast region ravaged by hurricanes in 2005, revenue jumped to $365 million from $236.4 million for the quarter. For the year, revenue increased about $300 million to $1.3 billion.
