Harrah's Reports Higher Earnings

Harrah's Entertainment Inc., which is being bought by private equity firms in a $17.1 billion deal, said May 8 its first-quarter earnings edged up 2%, as higher Las Vegas and Atlantic City revenue offset increased operating costs.

The world's largest casino company by revenue said net income rose to $185.4 million, or 98 cents per share, from $182.4 million, or 98 cents per share, a year ago. However, excluding one-time items, the company posted profit from continuing operations of 88 cents per share, down 14% from $1.02 per share a year ago.

Revenue climbed 13% to $2.66 billion from $2.36 billion last year. Revenue at properties Harrah's has operated for more than a year rose 3.6% from the 2006 first quarter.

On average, analysts surveyed by Thomson Financial were looking for profit of 99 cents per share on revenue of $2.51 billion.

The company said Las Vegas revenue climbed 9% to $898.6 million, while sales from Atlantic City casinos rose 11% to $546 million, driven by the January 2007 opening of a 2,750 slot casino at Harrah's Chester in Philadelphia. However, higher operating expenses, including promotional and marketing costs aimed at attracting and retaining customers, led to declines in income from operations for the Atlantic City region.

Harrah's is the world's largest casino company by revenue, operating 39 casinos across the United States, including Caesars Palace, Bally's and Paris on the Las Vegas Strip. Included in its holdings are racetracks such as Louisiana Downs in Bossier City, La., a 50% ownership in Turfway Park in Florence, Ky. and Bluegrass Downs harness track in Paducah, Ky.

Harrah's sale to Apollo Management and Texas Pacific Group is expected to close by year-end.