Shares of MTR Gaming Group (Nasdaq:MNTG), owner of Mountaineer Park in West Virginia, fell more than 27% on Tuesday, a day after the racetrack, casino and hotel operator reported lingering problems in converting its slot machines to higher wagers.
MTR shares regained some ground but were still down more than 21% percent, or $3.59, at $13.27 as of 2 p.m. Volume was heavy with more than 4.4 million shares changing hands compared with the company?s average daily volume of 525,727 shares.
Chester, West Virginia-based MTR said it expects fourth-quarter revenues of $54.2 million and net income of $2.9 million to $3.1 million, or 10 cents to 11 cents per diluted share, up from 9 cents per share a year earlier.
MTR said its results were affected by continuing supplier delays in converting slot machines Mountaineer to accept $5 as the increased maximum wager.
Wall Street analysts said investors were caught off guard by the problems and also by the company's announcement that it would report higher expenses related to the opening of its new hotel at the racetrack.
''People don't like surprises,'' said Jefferies & Co. analyst Lawrence Klatzkin.
He said operations are running well and the bulk of problems are related to third-party difficulties.
''Once that is solved, this company should be right in line with what everyone thinks,'' Klatzkin said. ''Our forecasts for the company after the hotel opens up are basically unchanged,'' he said.
MTR plans to open its new hotel convention center during the second quarter of this year, which analysts believe will help solidify its operations.A report by Reuters Securities contributed to this report