Park Place Entertainment Corporation (NYSE: PPE) today lowered its estimate of adjusted third quarter earnings to $0.14 to $0.16 per diluted share. In a conference call with investors on July 29, the company had estimated adjusted third quarter earnings at $0.17 to $0.19 per diluted share.
The company also anticipates that non-operating impairment losses related to the termination of an energy contract with Enron Corporation and damage from Tropical Storm Isidore will further reduce third quarter net income to an estimated range of $0.12 to $0.14 per diluted share.
The company attributed the change in guidance principally to results at Caesars Palace in Las Vegas. Caesars results were impacted by an abnormally low table hold percentage and continuing construction disruption, which resulted in significantly lower slot volumes.
Company-wide results during the first two months of the quarter were generally consistent with expectations, with August showing improvement over July. Caesars Palace was the exception. In September, each region was somewhat under plan, with the most significant impact felt in the West, principally at Caesars Palace.
For the quarter as a whole, results for the Eastern Region look to be slightly above expectations. Results for the Mid-South Region are expected to be somewhat under expectations, despite strong performances by Caesars Indiana and Sheraton Tunica. In the West, Bally’s/Paris performed significantly ahead of expectations.
The voluntary termination of the Enron contract resulted in a one-time charge of approximately $7.5 million, which the company expects will be more than offset by future energy cost savings. In addition, Tropical Storm Isidore caused an estimated $2.5 million in damage to the company’s Gulf Coast properties. That damage will be charged against the company’s insurance deductible.
The company will release complete third quarter results on October 24, and has scheduled a conference call for investors for 11 a.m. Pacific Daylight Time (1 p.m. CDT and 2 p.m. EDT) on that day. The call also will be accessible through the company’s web site at www.parkplace.com.
Park Place Entertainment owns, manages or has an interest in 28 gaming properties operating under the Bally’s, Caesars, Flamingo, Grand Casinos and Hilton brand names with a total of approximately 2 million square feet of gaming space, more than 28,000 hotel rooms and 55,000 employees worldwide.
Additional information about Park Place Entertainment can be accessed through the company’s 24-hour investor relations service. Individuals may call toll-free 877-PPE-NYSE (877-773-6973) or visit www.parkplace.com to obtain the latest company news and stock price information, or to request information by email, fax or postal mail delivery.