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Boyd Gaming (BYD) Q3 Earnings Meet Estimates, Revenues Lag

Zacks Equity Research

Boyd Gaming Corporation BYD reported mixed third-quarter 2019 results, wherein earnings met the Zacks Consensus Estimate, while revenues missed the same. Nevertheless, both the top and bottom lines grew impressively on a year-over-year basis. Notably, shares of the company increased more than 1% on Oct 22, following the results.

Let’s Delve Deeper

In the quarter under review, adjusted earnings came in at 39 cents per share, in line with the Zacks Consensus Estimate. The bottom line increased a notable 69.6% year over year on strong revenues and higher margins.

Revenues came in at $819.6 million, which missed the consensus mark of $830.5 million but improved 33.9% on a year-over-year basis. The revenue growth can be primarily attributed to strong segmental performance.

Boyd Gaming Corporation Price, Consensus and EPS Surprise

Boyd Gaming Corporation Price, Consensus and EPS Surprise

Boyd Gaming Corporation price-consensus-eps-surprise-chart | Boyd Gaming Corporation Quote

Notably, third-quarter revenues worth $212.9 million were realized from its acquisitions of Ameristar Kansas City, Ameristar St. Charles, Belterra Resort, Belterra Park and Valley Forge Casino Resort.

Total adjusted EBITDAR during the reported quarter totaled $213.5 million, up 43.5% year over year. Of these, $62.1 million was contributed from the above-mentioned acquisitions.

Segmental Details

Las Vegas Locals

Revenues at this segment amounted to $213.3 million, up 2.2% year over year. Moreover, the segment’s adjusted EBITDAR also increased 6.7% to $64.1 million from $60 million in the year-ago quarter. This segment recorded the highest third-quarter adjusted EBITDAR since 2005, backed by The Orleans and Aliante. Adjusted EBITDAR margins improved nearly 130 basis points (bps).

Downtown Las Vegas

At this segment, revenues rose 2.5% from the prior-year quarter to $60.6 million. Adjusted EBITDAR of $11.9 million also increased 4.7% from $11.4 million in the prior-year quarter. The upside was mainly driven by continued strength in Hawaiian customer segments and strong pedestrian traffic throughout the downtown area.

Midwest and South Segment

Revenues at this segment improved 58.5% from the year-ago quarter to $545.7 million. Adjusted EBITDAR was $156.2 million, up 59.7% from $97.8 million in the year-ago period. The company's five newly acquired properties generated adjusted EBITDAR growth of approximately 6% from a year ago.

However, same-store sales were negatively impacted by flooding and property closures, caused by tropical storms along the Gulf Coast in July and September.

Other Financial Details

As of Sep 30, 2019, the company had cash on hand of $235.1 million. Total debt amounted to $3.85 billion.

For 2019, Boyd Gaming continues to expect total adjusted EBITDA within $885-$910 million.

Zacks Rank

Boyd Gaming — which share space with Las Vegas Sands Corp. LVS, MGM Resorts International MGM and Penn National Gaming, Inc. PENN in the Zacks Gaming industry — currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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