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Red Rock Resorts (RRR) Q2 Earnings Lag Estimates, Revenues Top

Zacks Equity Research

Red Rock Resorts, Inc. RRR reported mixed second-quarter 2019 financial numbers, wherein earnings fell short of the Zacks Consensus Estimate but revenues surpassed the same. Notably, this marked the company's sixth straight quarter of revenue beat. However, earnings missed the consensus mark in three of the trailing four quarters.

Adjusted earnings came in at 13 cents per share, which lagged the Zacks Consensus Estimate of 17 cents. In the prior-year quarter, the company had reported adjusted earnings of 33 cents per share.

Revenues totaled $482.9 million, faring better than the Zacks Consensus Estimate of $443 million. The top line also increased 16% year over year. The uptick can primarily be attributed to a year-over-year gain in Las Vegas operations, which overshadowed decline in Native American management fees.

Casino revenues in the quarter amounted to $245.3 million, up 3.7% year over year. Food and beverage revenues increased 45.6% to $137.8 million and other revenues rose 8% to $26.9 million. Also, room revenues improved 15.4% to $49.3 million. Management fees revenues rose 11.5% to $23.6 million.

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

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

Red Rock Resorts, Inc. price-consensus-eps-surprise-chart | Red Rock Resorts, Inc. Quote

Segmental Details

Las Vegas Operations


Revenues at this segment summed $457.8 million, up 16.3% year over year. This uptick can be attributed to robust gaming and non-gaming business. Adjusted EBITDA increased to $101.7 million, which decreased 9.7% on a year-over-year basis. The segment’s margin contracted 640 basis points to 22.2%.

Native American Management

Revenues at this segment increased 11.6% to $23.5 million. Meanwhile, adjusted EBITDA decreased to $22 million from $19.8 million on account of rise in management fees generated under the Graton Resort management agreement.  

Other Financial Details

As of Jun 30, 2019, Red Rock Resorts had cash and cash equivalent of $100.2 million. Outstanding debt at the end of the reported quarter was $3 billion. The company declared a quarterly cash dividend of 10 cents, payable Sep 27, 2019, to its shareholder of record as of Sep 13, 2019.

Zacks Rank & Stocks to Consider

Red Rock Resorts has a Zacks Rank #5 (Strong Sell).

Better-ranked stocks worth considering in the same space include Penn National Gaming, Inc. PENN, International Game Technology PLC IGT and Melco Resorts & Entertainment Limited MLCO. While Penn National Gaming sports a Zacks Rank #1 (Strong Buy), International Game Technology and Melco Resorts & Entertainment carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Penn National Gaming, International Game Technology and Melco Resorts & Entertainment have an impressive long-term earnings growth rate of 10%, 10% and 22.1%, respectively.

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