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Caesars' (CZR) Q2 Earnings Lag Estimates, Revenues Surpass

·4 min read

Caesars Entertainment, Inc. CZR reported mixed second-quarter 2022 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. The top line rose year over year, while the bottom line declined. Following the results, shares of the company dropped 1.4% during the after-hour trading session on Aug 2.

Tom Reeg, CEO of Caesars Entertainment, stated, "Our second quarter results reflect a consolidated EBITDA record for our brick and mortar properties led by an all-time quarterly EBITDA record in Las Vegas and continued strength in our regional markets when compared to 2019. Operating results in our digital segment improved dramatically versus the first quarter and we are optimistic regarding trends in this segment for the balance of the year."

Earnings & Revenue Discussion

In the quarter under review, the company posted adjusted earnings per share (EPS) of 16 cents, missing the Zacks Consensus Estimate of 25 cents. In the prior-year quarter, the company reported an adjusted EPS of 48 cents.

Caesars Entertainment, Inc. Price, Consensus and EPS Surprise

 

Caesars Entertainment, Inc. Price, Consensus and EPS Surprise
Caesars Entertainment, Inc. Price, Consensus and EPS Surprise

Caesars Entertainment, Inc. price-consensus-eps-surprise-chart | Caesars Entertainment, Inc. Quote

 

Net revenues during the quarter were $2,821 million, beating the Zacks Consensus Estimate of $2,773 million by 1.7%. The top line increased 12.7% on a year-over-year basis.

During the quarter, same-store adjusted EBITDA came in at $978 compared with $1,011 million reported in the prior-year quarter. Same-store adjusted EBITDA, excluding Caesars’ Digital segment, was $1.05 billion during the quarter compared with $1.01 billion reported in the year-ago quarter.

Segmental Performance

During the quarter, net revenues from the Las Vegas segment were $1,142 million compared with $855 million reported in the year-ago quarter. The segment’s adjusted EBITDA was $547 million compared with $423 million reported in the prior-year quarter.

Coming to the Regional segment, net revenues during the quarter were $1,454 million compared with $1,516 million reported in the year-ago quarter. The segment’s adjusted EBITDA totaled $513 million compared with $604 million reported in the prior-year quarter.

During the quarter, net revenues from the Caesars Digital segment came in at $152 million compared with $117 million reported in the prior-year quarter. The segment’s adjusted EBITDA came in at a negative $69 million against $2 million reported in the year-ago quarter.

In the Managed and Branded segment, net revenues during the quarter were $74 million compared with $56 million reported in the prior-year quarter. The segment’s adjusted EBITDA amounted to $22 million compared with $24 million reported in the prior-year quarter.

Balance Sheet

As of Jun 30, 2022, the company’s cash and cash equivalents were $997 million compared with $814 million as of Mar 31, 2022.

Net debt as of Jun 30, 2022, stood at $13,197 million compared with $13,492 million as of Mar 31, 2022.

Zacks Rank & Key Picks

Caesars Entertainment currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

Some better-ranked stocks in the Zacks Consumer Discretionary sector are G-III Apparel Group, Ltd. GIII, MGM Resorts International MGM and Choice Hotels International, Inc. CHH.

G-III Apparel sports a Zacks Rank #1. GIII has a trailing four-quarter earnings surprise of 97.5%, on average. The stock has declined 28% in the past year.

The Zacks Consensus Estimate for GIII’s current financial year sales and EPS indicates growth of 13.8% and 8.2%, respectively, from the year-ago period’s reported levels.

MGM Resorts carries a Zacks Rank #2. MGM has a trailing four-quarter earnings surprise of 212.5%, on average. Shares of the company have declined 10.5% in the past year.

The Zacks Consensus Estimate for MGM’s current financial year sales and EPS suggests growth of 27.6% and 240.3%, respectively, from the year-ago period’s reported levels.

Choice Hotels carries a Zacks Rank #2. CHH has a trailing four-quarter earnings surprise of 20.4%, on average. The stock has increased 0.3% in the past year.

The Zacks Consensus Estimate for CHH’s current financial year sales and EPS indicates growth of 17.7% and 13.6%, respectively, from the year-ago period’s reported levels.


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