I don't know whether to be impressed with or mystified by investors of Penn National Gaming (NASDAQ:PENN).

On Wednesday, the operator of casinos and racetracks issued some unwelcome news: Third-quarter profit, as well as the company's guidance, fell below the Wall Street consensus. Full-year earnings and revenue will be less than what the company had predicted in July.

Yet shares were up by more than 5% in midday trading Wednesday.

Although some casino operators are delaying or suspending their ambitions during the recession, Penn National, strapped with cash due to renegotiated terms with lenders and the issuance of new debt, is forging ahead in several U.S. time zones.

To longtime investors, these plans have been discussed periodically this year. To new or prospective investors, Wednesday's recitation reveals an optimistically aggressive company.

Grand plans
Investors beware: Many of Penn National's plans rely on voters or legislators. However, in a best-case scenario, Penn National could significantly add to the 16 properties that it owns or operates.

Here's a brief look:

  • The company expects to learn today from Maryland regulators if it can build a slot machine facility in a county that borders both Pennsylvania and Delaware -- states that allow racetrack casinos and/or stand-alone slot machine facilities.
  • Penn National recently became half-owner of a joint venture with International Speedway (NASDAQ:ISCA), bidding to build a casino next to a motor-sports track in Kansas City, Kan. State regulators will hopefully decide by year's end.
  • The company supports a proposed amendment to Ohio's state constitution that would permit full-service casino gambling in four large cities. A vote is set for Nov. 3. The company is also awaiting resolution of a political-legal dispute over whether racetracks can allow slot machines. Penn National owns a Toledo track and says that it has its "eye on other racetracks in the state."
  • Penn National is one of several bidders seeking a contract to build a slot machine facility next to the Aqueduct Race Track in New York City. Among the many competitors for this piece of prime real estate are Wynn Resorts (NASDAQ:WYNN) and Harrah's Entertainment.
  • Penn National is exploring the prospects of acquiring the bankrupt, partially completed Fontainebleau, putting it in the Las Vegas neighborhood of such heavyweights as Wynn, Las Vegas Sands (NYSE:LVS), and MGM Mirage (NYSE:MGM). The company said Wednesday that it has talked to a prospective partner and has made an initial proposal to Fontainebleau creditors.

Yesterday and tomorrow
Despite the ambitious long-term goals, investors can't ignore the immediate past or the immediate future.

For the third quarter, Penn National's earnings per share of $0.33, excluding special items, fell $0.02 below the Wall Street consensus. Revenue of $620.4 million missed the company's forecast of $651.4 million.

The company had forecast earnings per share for the year at $1.27; recently it changed that guidance to a more conservative $1.01 per share. Revenues took a similar hit -- down from $2.46 billion guidance to $2.39 billion.

Over the years, Penn National has rewarded investors by capitalizing on opportunities outside Las Vegas, Macau, and Atlantic City. However, like most companies, it isn't immune to recession, and shareholders have paid the price over the last two years. However, with more states turning toward gambling to reinforce their budgets, Penn National should be positioned well when there's a full-fledged gambling revival.

Let us know what you think: Is it crazy to be thinking about Las Vegas expansion right now? Leave your comments below!