It's a good sign for a "locals" casino operator when it dominates each of the markets it competes in. It also doesn't hurt to be the dominant locals casino operator in Las Vegas, the hottest market of them all.
This morning, Station Casinos
For the quarter, the company's revenues climbed 15% to $264.7 million. Meanwhile, EBITDA (earnings before interest, taxes, depreciation, and amortization) climbed 27% to $107.1 million, boosting the EBITDA margin from an already-impressive 34.3% to an astounding 39.2%. Adjusted for one-time expenses and development costs, earnings increased 38% to $0.58 per share.
Station Casinos had forecast EBITDA of $94 million to $98 million and adjusted earnings of $0.48 to $0.52 per share.
The successes of Las Vegas Strip operators such as MGM Mirage
Station Casinos expects its explosive growth to continue, forecasting EBITDA of $107 million to $113 million for the first quarter, with adjusted earnings of $0.56 to $0.52 per share. For the full year, the company expects EBITDA to jump from $385.4 million in fiscal 2004 to between $425 million and $440 million in fiscal 2005. Earnings, which rose 65% to $2.10 per share in fiscal 2004, are expected to climb to $2.22 to $2.35 per share.
Station Casinos carries a substantial premium, with an enterprise value of about 11.5 times 2005 EBITDA. While the stock isn't cheap, the company is a long-term hold as a best player with little prospect for competition.
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Fool contributor Jeff Hwang owns none of the companies mentioned above.