Penn National Gaming, Inc. PENN reported fourth-quarter 2020 results, with earnings and revenues missing the Zacks Consensus Estimate. Notably, both the metrics missed the consensus mark after beating in the preceding two quarters.
Despite reporting lower-than-expected results, shares of the company gained 8.5% in the after-hours trading session on Feb 4. Despite the pandemic, the company is confident about its long-term growth strategy and Barstool profit. The company launched Barstool Sportsbook app in Michigan last month and is confident about expanding it to at least 10 states by the end of 2021.
Jay Snowden, president and chief executive officer, has said "Our investment in Barstool Sports provides us with a fully integrated media platform to support our evolution from the nation’s largest regional gaming operator to the best-in-class omnichannel provider of retail and online gaming and sports betting entertainment."
Earnings & Revenues Discussion
Adjusted earnings came in at 7 cents per share, missing the Zacks Consensus Estimate of 21 cents. In the year-ago period, the company had reported a loss of 80 cents per share.Net revenues totaled $1,027.4 million, which missed the consensus mark of $1,074 million by 4.3%. Also, the top line declined 23.4% from the year-ago quarter.
Penn National Gaming, Inc. Price, Consensus and EPS Surprise
Penn National Gaming, Inc. price-consensus-eps-surprise-chart | Penn National Gaming, Inc. Quote
The Northeast segment reported revenues of $470.8 million, down 24.2% year over year. The South, Midwest, and West segments’ revenues were $249.2 million, $188.2 million and $79.5 million, down 7%, 32.6% and 49.7% year over year, respectively. Meanwhile, the Other segment reported revenues of $53.4 million, up 242.3% year over year.
Inside the Headlines
Penn National’s income from operations declined to $119.6 million in the fourth quarter compared with $11.3 million in the prior-year quarter. Adjusted EBITDAR decreased 8.5% from the year-ago quarter to $365.4 million. Moreover, adjusted EBITDAR margin expanded to 35.6% from 29.8% a year ago.
Other Financial Information
At fourth quarter-end, cash and cash equivalents increased to $1,853.8 million from $437.4 million as of Dec 31, 2019. Bank debt as of Dec 31, 2020 was $1,628.1 million, down from $1,929.8 million on Dec 31, 2019.
Zacks Rank
Penn National — which shares space with Wynn Resorts WYNN, Las Vegas Sands Corp. LVS and Boyd Gaming Corporation BYD in the Zacks Gaming industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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