Churchill Downs Earnings Fall, Revenues Increase

Churchill Downs Inc. reported Tuesday that earnings tumbled in the third quarter, as the year-ago period benefited from a hefty gain on the sale of assets.

Income for the quarter that ended Sept. 30, fell 88% to $8.8 million, or 64 cents per share, from $71.6 million, or $5.30 per share, a year ago. The latest quarter includes a gain of $4.2 million on the sale of assets, while the year-ago period includes a $69.9 million gain. Earnings from continuing operations fell 14% to $2.7 million, or 20 cents per share.

Revenue rose 4.6% to $106.4 million from $101.7 million a year earlier. The company attributed increased revenue to strong performance in Louisiana.

"We remain encouraged by the solid results delivered by our video poker and simulcast-wagering operations in Louisiana, which continue to outperform their pre-Hurricane Katrina business levels," chief executive officer Robert Evans said. The company also announced that repairs at Fair Grounds Race Course in New Orleans are nearing completion, and that the track will reopen Thanksgiving Day.

Evans also said a large number of breakdowns at Arlington Park and a subsequent decline in business there impacted the results.

"All of our operating units showed improvement in the quarter with the exception of Arlington Park, where a high level of on-track horse injuries and the related publicity appeared to depress field sizes, attendance and, in turn, wagering," Evans said. "Multiple independent examinations of the Arlington Park dirt track revealed no causal factors. We are evaluating numerous, significant changes in our racing program and cost structure at Arlington Park to be implemented in time for our 2007 meet.

CDI also reported it completed its sale of Ellis Park in Henderson, Ky., during the quarter.