Caesars Entertainment Q3 Loss Widens, Names Eric Hession CFO

(RTTNews) - Casino operator Caesars Entertainment Corp. (CZR) on Monday reported a loss for the third quarter that widened from last year, reflecting higher interest expenses and a lower tax benefit that offset an increase in revenues. The loss per share for the quarter was also wider than analysts' estimates.

Caesars Entertainment named Eric Hession, the company's senior vice president and treasurer, as chief financial officer of the company. Hession will succeed Donald Colvin, who is retiring at the end of December 2014.

Las Vegas, Nevada-based Caesars Entertainment reported third-quarter net loss of $908.1 million or $6.29 per share, wider than net loss of $761.4 million or $6.03 per share in the same period last year.

On average, three analysts polled by Thomson Reuters expected the company to report loss of $1.47 per share for the quarter. Analysts' estimates typically exclude special items.

However, net revenues for the quarter grew 6 percent to $2.21 billion from $2.09 billion last year. Analysts had a consensus revenue estimate of $2.24 billion for the quarter.

The increase in revenues were driven by growth at Caesars Entertainment Resort Properties or CERP and Caesars Growth Partners, LLC or CGP. The company noted that strength in social and mobile games as well as sequential improvement in regional markets were offset by several items such as out of service rooms and unfavorable hold at Caesars Palace.

General weakness in VIP volumes, the reduction of room nights available in Las Vegas as a result of the LINQ Hotel renovation, and business disruption at Caesars Palace due to construction and show cancellations resulted in lower core business volumes compared to the prior-year quarter. Casino revenues for the quarter edged up 0.3 percent to $1.40 billion.

Operating expenses for the quarter declined 3 percent to $2.54 billion from $2.61 billion in the same period last year. However, interest expense for the quarter increased 26 percent to $708.3 million.

The latest quarter's results include an income tax benefit of $169.9 million, down from $374.2 million in the prior-year period.

Looking ahead, Caesars Entertainment said it is working to reduce expenses and increase EBITDA across the company through a variety of identified initiatives in operations, marketing and corporate expenses. The company expects to produce an incremental $250 million to $300 million of EBITDA in 2015 as a result of these actions.

Further, the company said it has commenced formal talks with several groups of creditors to improve the financial condition of Caesars Entertainment Operating Company, Inc. or CEOC. The company is focused on deleveraging at CEOC.

In a separate statement, Caesars Entertainment said it has appointed Eric Hession, the company's senior vice president and treasurer, as chief financial officer, with effect from January 1, 2015. Hession will succeed Donald Colvin, who is retiring at the end of December.

Caesars Entertainment noted that Colvin's departure is unrelated to the company's financial condition or financial reporting. The company also said that there is no disagreement between Colvin and the company.

In his role as CFO, Hession, aged 40, will be responsible for Caesars' finance functions and will report to Gary Loveman, Chief Executive Officer and President of Caesars Entertainment Corp. In his current capacity, Hession is responsible for financial planning, treasury and investor relations. He joined the company in 2002 after four years with Merck & Co, Inc. (MRK).

CZR closed Monday's trading at $11.54, down $0.56 or 4.63 percent on a volume of 1.70 million shares. In after-hours, the stock further declined $0.84 or 7.28 percent to $10.70.