Two weeks ago, Harrah's Entertainment
Harrah's revenues in the first quarter climbed 24.2% to $1.26 billion, helping property EBITDA (earnings before interest, taxes, depreciation, and amortization) jump 30.6% to $352 million (compared with the same period last year). Meanwhile, adjusted earnings grew 27.6% to $0.97 per share, comparing favorably to the most recent analyst estimate for earnings of $0.93 per share.
On April 6, the company's guidance for adjusted EPS of $0.95 to $0.99 was well ahead of the analysts' $0.83 per-share earnings estimate.
The gains were fairly widespread, and, as has been typical of the company, came from both acquisitions and operational improvements.
Cross-market play rose 15.6%, helping revenues at Harrah's Las Vegas properties grow 11.6% to $288.5 million and property EBITDA climb 19.5% to $98.2 million. Last year's acquisition of Horseshoe Gaming led to improved results in the South Central region, with the addition of Horseshoe Bossier City in Louisiana and Horseshoe Tunica in Mississippi. The Horseshoe acquisition also brought gains in Indiana.
Harrah's recent expansion in St. Louis -- where the company competes head-to-head with Ameristar Casinos
Overall results in Atlantic City were mostly flat.
On the outside, it is easy to point to acquisitions driving Harrah's rapid revenue growth, but here's the most impressive stat: Same-store sales rose 6% compared with the year-ago period. And as CEO Gary Loveman noted, the company has shown same-store sales growth in 24 of the last 25 quarters -- "remarkably consistent organic growth." This no doubt is attributable to Harrah's top-end marketing capabilities; one of the more recent additions is that members of Harrah's slot clubs can rack up slot points and use their player's cards on things such as free meals in the same way that you would use a credit card.
In contrast, most casinos require a trip to a rewards booth to redeem slot points. Merger partnerCaesars Entertainment
As an investor, Harrah's sheer size is a little unwieldy for my tastes, and the company won't be getting any smaller when it swallows fellow giant Caesars Entertainment later this year. That said, following rival MGM Mirage's
Fool contributor Jeff Hwang owns shares of Ameristar Casinos.
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