What happened
Shares of Century Casinos (NASDAQ: CNTY) fell as much as 20.5% in trading on Tuesday after the company reported earnings. The casino stock closed trading down 9.2% on the day.
So what
Net revenue for the fourth quarter of 2021 rose 27% from a year ago to $107.3 million, but earnings from operations fell 12% to $16.4 million. Earnings per share of $0.13 were down from $0.22 a year ago and fell below the $0.18 that analysts were expecting.
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Smaller casino companies have been dealing with higher labor costs and competition from at-home gambling options online, and that's proving to be a headwind. That said, Century Casinos is still profitable and revenue is up, so it's not all bad for the company.
Now what
Small and regional casino companies face a number of long-term headwinds that could be tough to get around. The most important is the proliferation of online gambling, which could pull a lot of gambling out of regional casinos around the world.
Century Casinos also owns properties in Poland, which is adjacent to Ukraine. Russia's invasion of Ukraine is complicating matters further. At the end of the day, the company is a steady casino operator, but investors shouldn't expect too much growth as competition improves in the coming years.
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