Please ensure Javascript is enabled for purposes of website accessibility

Churchill Downs Reports Q1 Results, Says It Has Cash Reserves for a Year or More

By Rhian Hunt – Apr 29, 2020 at 6:16PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A followup earnings call is scheduled for the morning of April 30.

Entertainment, wagering, and racing company Churchill Downs Incorporated (CHDN 0.39%) reported its first-quarter results today after the stock market closed. While the company's revenue predictably fell with the postponement of the iconic Kentucky Derby race to September and other negative effects of the COVID-19 pandemic, it still beat some analyst expectations. Churchill Downs noted it also has robust liquidity.

Analyst consensus estimates put net revenue for the quarter at $251.4 million, down 5.3% year over year, while earnings per share were forecast at $0.33, down 47.6% from Q1 2019.

A bay thoroughbred jumping.

Image source: Getty Images

In fact, Churchill Downs narrowly beat analyst expectations by posting $252.9 million in net revenue. However, it fell short on earnings, delivering adjusted diluted EPS of just $0.05 per share, a 92% plunge from its Q1 2019 $0.63 EPS. Overall, the company generated $2.0 million in adjusted net income for the first quarter of 2020 ending on March 31, compared with $25.5 million last year. The shortfall, as expected, results from casino and racetrack closures in response to the novel coronavirus.

Churchill Downs reports that it ended the quarter with $700.9 million in cash reserves after drawing down its revolving credit facility. It states that Q2 2020 will probably be "materially impacted," since it postponed the Kentucky Oaks racing event and its casinos remain closed indefinitely.

The company struck a positive note regarding its ability to weather the current viral crisis. Noting its strong cash reserves and its plans to cut capital expenditures and maintenance costs, it says it can pay for its business operations and meet its financial obligations for at least a year.

Churchill Downs will hold a live earnings conference call tomorrow at 9 a.m. Eastern time.

Rhian Hunt has no position in any of the stocks mentioned. The Motley Fool recommends Churchill Downs. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Churchill Downs Stock Quote
Churchill Downs
$197.86 (0.39%) $0.77

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/06/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.