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Red Rock Resort revenues up in 1Q

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Steve Marcus

A view of the hotel tower at the Red Rock hotel-casino in Summerlin Saturday, Oct. 24, 2015.

Thu, May 4, 2017 (4:13 p.m.)

Red Rock Resorts, which owns a majority indirect equity interest in Station Casinos, a provider of gaming and entertainment to Las Vegas locals, reported its first-quarter earnings Thursday.

Company: Red Rock Resorts (NASDAQ:RRR)

Revenue: Net revenues increased 16.3 percent to $417.7 million, compared to revenue of $359.2 million in the first quarter of 2016.

Loss: Net income decreased 24 percent to $45.2 million, compared to the first quarter of 2016 when it was $59.5 million. The company said this was mostly because of the inclusion of the provision for income tax.

Loss per share: The price per share for the first quarter of 2017 was $0.30, compared to $0.64 for the first quarter of last year.

Takeaways: Economic growth, renovation and redevelopment were the watchwords in the first-quarter earnings call for Red Rock Resorts, which owns and operates locals giant Stations Casinos.

During the call, CFO and Treasurer Marc J. Falcone spoke at length about the improving health of the Las Vegas economy, so important to locals casinos.

“There has been 69 straight months of job growth and unemployment is the lowest it’s been in 10 years,” Falcone said. He also mentioned how retirees still find Southern Nevada’s cost of living and low taxes attractive.

Falcone discussed Station Casinos’ company-wide slot system upgrade, saying early guest feedback was positive. He also boasted about the renovation of the Palace Station, saying the upgrades have transformed the property’s appearance.

He also talked about the contributions to company earnings by the Palms, which Stations acquired last year. But despite questions from the analysts, he refused to talk about the company’s plans to redevelop the property.

“We’ve made exciting progress in our development plans for the Palms,” Falcone said. “And we should be able to share those shortly.”

Falcone was also unwilling to talk about plans the company has for properties it owns in other gaming jurisdictions, including Reno. However, he did say the company is preparing for growth.

“In the last several months we completed a series of debt-related actions,” he said. “These, along with $250 million partial redemption of senior notes, are expected to decrease our annual interest expense by approximately $23 million. This gives us an increased ability to do high-return growth projects.”

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