Caesar's Entertainment Loses $466m In Q2

Caesars Entertainment Corp (CZR) has released its results for the second quarter of 2014, revealing a 3% increase in revenues to $2.19 billion from $2.12 billion in Q2 a year earlier. However, the Nevada-based casino giant is carrying a high debt burden of $24.2 billion and after paying out $653.7 million in interest repayments, in addition to costs related to mergers and acquisitions, the company made a net loss of $466.4 million in Q2, more than twice the $204.2 million loss reported in Q2 2013.
As a result, CZR is currently trying to restructure its heavy debt load, whilst strengthening its healthier businesses, and as Caesars CEO Gary Loveman, explains:
“The transaction we are announcing today is the latest in a series of steps intended to deleverage CEOC and position it for a potential stock listing. The transaction will reduce CEOC’s leverage and interest payments. We are steadfast in our commitment to work constructively with creditors to deleverage CEOC and create value.”
Concentrating on the positives, Loveman said much of the gains reported in Q2 came from increased VIP baccarat turnover at its Las Vegas operations. Elaborating further, Loveman said: “For the second quarter, our business demonstrated continued strength in Las Vegas driven in part by our hospitality investments, which was offset by the persistent softness in the regional markets and Atlantic City.”
Therefore, Caesar’s Entertainment is likely to face some significant challenges for some time to come as regional markets outside of Vegas continue to stall due to decreasing demand. One way in which the company is now seeking to meet the challenges involves maximizing earnings on lower revenue” by reducing its operating capacity “to appropriately align supply in certain markets with the levels of demand.” One such measure includes shutting down Harrah’s Tunica in Mississippi, as well as the Showboat Atlantic City in New Jersey at the end of August, reducing the number of Caesars’ Atlantic City casinos down to three.
Following its Q2 results being released yesterday, Caesars Entertainment Corp shares traded up by 2.32% at $13.67, and so far today CZR shares have hit $13.74 giving the company a market capitalization of $1.98 billion. Nevertheless, CZR shares have been as high as $26.74 in the past 52 weeks.
Formerly known as Harrah’s Entertainment Inc, Caesars Entertainment Corporation currently operates over 50 casinos and hotels across the USA.