Please ensure Javascript is enabled for purposes of website accessibility

A Little Bad Luck at Boyd Gaming

By Travis Hoium – Updated Apr 6, 2017 at 10:52AM

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

Boyd Gaming beats expectations; better luck could have made the numbers better.

Gaming conditions seem to be getting better across the country, but it's tough to post a big quarter when your customers are extra lucky at your tables.

On Monday, Boyd Gaming (NYSE: BYD) reported revenue of $595.4 million, down 4.1% on the quarter (revenues at the Borgata hotel and casino in Atlantic City were down 7.2%). Total adjusted EBITDA was $115.4 million, down 18.2% from last year, and net income was $5.6 million, or $0.06 per share. But there was approximately $9 million of "bad luck" at Borgata table games, so both revenue and EBITDA could have been significantly better.

This looks very disappointing on the surface, but Wall Street was expecting worse, which gave the stock a boost yesterday. Management was upbeat, pointing to increasing stability in the market in October and the probability of positive comparisons beginning in the fourth quarter.

Just say no to Borgata
Boyd also announced it would not purchase the other half of the Borgata from MGM Resorts (NYSE: MGM). Earlier this month, MGM agreed to sell its half of Borgata to Leonard Green & Partners to exit the Atlantic City market. Boyd had a chance to buy the stake, but said the price would not give sufficient return to shareholders and the company is focused on deleveraging its balance sheet.

Boyd did make progress on deleveraging, as a payment from Borgata allowed the company to reduce debt by $170 million, to $2.35 billion.

Hit or stay?
The quarter was an incremental positive for Boyd, but I would like to see some revenue and EBITDA increases before getting too excited about this stock. We will see next week if strength outside of Atlantic City and Las Vegas improved the fortunes of regional operator Ameristar Casinos (Nasdaq: ASCA).

Interested in reading more about Boyd Gaming? Click here to add it to My Watchlist, and My Watchlist will find all of our Foolish analysis on this stock.

More on gaming:

Fool contributor Travis Hoium always hits on an 11 and does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw.

Ameristar Casinos is a Motley Fool Hidden Gems selection. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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

MGM Resorts International Stock Quote
MGM Resorts International
MGM
$30.05 (-1.83%) $0.56
Boyd Gaming Corporation Stock Quote
Boyd Gaming Corporation
BYD
$47.02 (-2.91%) $-1.41
Ameristar Casinos Inc. Stock Quote
Ameristar Casinos Inc.
ASCA.DL

*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
339%
 
S&P 500 Returns
109%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2022.

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.