Associated Press Writer
LAS VEGAS - Profits more than doubled in the fourth quarter for Harrah's Entertainment Inc. as the world's largest gambling company beat Wall Street expectations despite a lengthy strike in Atlantic City.
For the three months ending Dec. 31, Harrah's earned nearly $77 million, or 68 cents per share, up from $35.4 million, or 32 cents a share, a year ago.
Fourth-quarter results included contributions from the three Horseshoe casinos that Harrah's bought last year and the sale of properties in Illinois and Mississippi.
Analysts surveyed by Thomson First Call had predicted earnings of 66 cents a share.
In trading Wednesday, Harrah's shares rose $2.38, or 3.73 percent, to close at $66.19 on the New York Stock Exchange. The stock has traded in a 52-week range of $39.61 to $77.40.
The company reported record fourth-quarter revenues of $1.19 billion, up 25 percent from revenues of $950.2 million in the 2003.
Cash flow rose 31 percent in the fourth quarter to a record $288.7 million, compared to a year ago.
Cash flow, or earnings before interest, taxes, depreciation and amortization, is a widely used measure of casino industry profitability.
For the full year, the company earned $367.7 million, or $3.26 per share, on revenues of $4.55 billion, compared with profits of $292.6 million, or $2.65 per share, on revenues of $3.95 billion in 2003. Cash flow increased to a record $1.22 billion in 2004, up 16 percent from $1.05 billion in 2003.
"It has been a very good year," Harrah's Entertainment Chief Executive Gary Loveman said in a conference call. "It's a good day to be ... in the gambling business."
Southern Nevada properties all recorded record quarters, including Harrah's Las Vegas and the off-Strip Rio hotel-casino, helping drive the profitable quarter.
Loveman said there was more demand than the company could handle in Las Vegas.
In the conference call, Loveman said he expected the merger between Harrah's and rival Caesars Entertainment Inc. to close in the next quarter.
"I remain very optimistic about the long-term earning potential of the combined company," Loveman said, later adding, "We will hit the ground running when this deal closes."
In July, Harrah's agreed to buy Las Vegas-based Caesars for $1.8 billion in cash and $3.4 billion in Harrah's stock. Harrah's also will assume about $4.2 billion in Caesars debt.
Harrah's, which is the world's largest gambling company by revenues, completed its $1.45 billion acquisition of Horseshoe Gaming Holding Corp. in July.
Deutsche Bank gambling analyst Marc Falcone wrote Wednesday in an investor's note that Harrah's is on a roll.
"We remain impressed with the company's recent results and if these trends continue, we believe the shares will likely trade higher."