Posted on Sat, May. 10, 2008
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STAFF AND WIRE REPORTS
Harrah's posts 2.1% sales decline
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Tunica loss offset by strong New Orleans
Harrah's Entertainment Inc., parent company of Grand Casino Biloxi and Margaritaville Casino, reported Friday it swung to a first-quarter loss due to costs associated with a deal to take it private and "challenging economic conditions."
The world's largest gambling company by revenue said it had a net loss of $187.8 million, compared with profit of $185.3 million in the same quarter a year earlier. The company reported a 2.1 percent decline in sales to $2.6 billion from $2.65 billion a year earlier.
The company reported continued strong performance at Harrah's New Orleans helped offset lower first-quarter results at Grand Casino Tunica, which is undergoing an extensive renovation and re-branding, expected to be completed in the second quarter of 2008. Construction continues on the Margaritaville Casino & Resort in Biloxi, which is scheduled to open in the first half of 2010.
Total revenues in Mississippi and Louisiana were down 2.5 percent for the first quarter of 2008 compared with last year, dropping from $390.5 million to $380.6 million.
"Our first-quarter results reflect the consequences of challenging economic conditions," Harrah's President Gary Loveman said. "However, we ended the first quarter with ample liquidity, and we continued to reduce expenses companywide."
Harrah's laid off about 100 employees in recent months when it closed the buffet at its Bally's hotel-casino on the Las Vegas Strip. A spokesman said 1,000 more jobs remain unfilled as a cost-saving measure after employees voluntarily left the company's Las Vegas work force of about 25,000.
Other Las Vegas-based casino companies are experiencing similar economic pressures. MGM Mirage, which reported letting 400 mid-level employees go last month, also said first-quarter profit tumbled 30 percent. Las Vegas Sands Corp. posted a first-quarter loss and Wynn Resorts Ltd. said its profits dropped 20 percent.
"We're seeing softness across the board," Loveman said in a conference call, "but much less so at the upper end. It is in many instances folks coming and playing at lower levels."
Harrah's announced in April it intends to change its name to Caesars Entertainment Corp. once it gets approval from regulatory agencies.
