Gaming stock Penn Entertainment (PENN 0.25%) didn't feel like a good bet on Thursday. After the company posted quarterly results that didn't meet analyst expectations, investors traded out of it to the point where its share price fell by almost 9%. And this was on the day when the benchmark S&P 500 index rose, advancing by nearly 1%.
Double miss in the first quarter
Before market open, Penn published its first-quarter figures. The on- and offline gaming company's revenue slumped slightly on a year-over-year basis, sliding by 4% to just under $1.61 billion. On the bottom line it flipped to a loss of almost $115 million, against first-quarter 2023's profit of $514 million. Penn's non-GAAP (adjusted), per-share result also turned negative, at $0.79 versus the year-ago surplus of $0.39.
Analysts tracking the stock were expecting better. Collectively, they were modeling revenue of $1.64 billion and an adjusted net loss of only $0.57.
With its casino operations early in the quarter, Penn was affected by bad weather that kept customers away from its facilities. Meanwhile, its interactive segment suffered from negative hold (the portion of gambled money that is kept by the casino operator) from major sports games.
The future is virtual
In its earnings release, Penn -- which runs the ESPN Bet online sportsbook -- nevertheless took an optimistic tone when discussing its future in the virtual gaming sphere. It quoted CEO Jay Snowden as pledging that "Our improved online product offering will help engage, reactivate, and retain our expanding database, while also advancing our strategy to create a highly differentiated experience for sports fans and sports bettors."
