Despite a wide geographic reach and a diverse offering of gambling products, Penn National Gaming (NASDAQ:PENN) produced second-quarter earnings and revenue that fell below analysts' estimates and its own forecasts.

The results issued Wednesday represented a reversal from the first quarter, when Penn National easily beat the Wall Street earnings consensus. The company also cut its full-year earnings forecast to $1.27 per share, down $0.11 from earlier guidance, and $0.17 below the average analyst estimate from Thomson Reuters. Shares were down sharply in early trading Wednesday.

These results suggest that if the recession continues to torment one of Wall Street's favorite casino operators, the second-quarter reports coming Thursday from less-favored Las Vegas Sands (NYSE:LVS) and Wynn Resorts (NASDAQ:WYNN) could be uncomfortable for shareholders.

Disappointing results
Excluding one-time events, Penn National earned $0.32 a share, or $0.04 below Wall Street expectations.

On a GAAP basis, net earnings per share of $0.27 trailed the year-ago quarter's $0.42. Second-quarter revenue of $580.8 million lagged the Wall Street consensus of $594.5 million and the year-ago quarter's $620.6 million.

The company said regional market trends "remain largely stable" and the number of visits to its properties "remain similar to prior periods," but consumers are spending less per visit. Three facilities were cited for much of the quarter's setback.  

Based on stock data from Tuesday, Penn National is the third-largest casino company traded in the U.S. by market cap, trailing Las Vegas Sands and Wynn Resorts. It is larger than China's Melco Crown Entertainment (NASDAQ:MPEL) and fifth-place MGM Mirage (NYSE:MGM).

Unlike its peers, Penn National avoids Las Vegas, Atlantic City, and Macau. It owns casinos, horse racetracks with slot machines, racetracks that feature only the horses, off-track wagering facilities, and a dog-racing track. It has 19 properties in 14 states and Canada.

Waiting for the next shoe to drop
With most major casino companies due to report later this week and next week, results so far have been subpar.

Last Friday, Pinnacle Entertainment (NYSE:PNK), a smaller player that lacks casinos in the Big Three destinations, also missed Wall Street estimates.

That day, privately held giant Harrah's Entertainment said its second-quarter revenue fell 12.7% year over year, with its Las Vegas-based revenue falling 19.2%.

Memo to casino investors: The recession isn't over, the pace of recovery will be uncertain, and the economy may still be filled with unpleasant surprises.

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Fool contributor Robert Steyer doesn't own shares of any companies cited in this story. Melco Crown Entertainment is a Motley Fool Global Gains recommendation. The Fool has a disclosure policy.