Trump casinos lose $22.1M in fourth quarter

06.03.2006, Lesen Sie hier den Bericht über «Trump casinos lose $22.1M in fourth quarter».

ATLANTIC CITY — Trump Entertainment Resorts Inc. reported a $22.1 million loss in the fourth quarter Thursday, suggesting that the company's post-bankruptcy recovery plan will need more refining before its casinos begin turning consistent profits.

One gaming analyst said the fourth quarter was particularly disappointing because the third quarter had been profitable. But another analyst characterized the fourth quarter as virtually meaningless because the company is still reorganizing its management ranks and tweaking its marketing strategy.

“It wasn't a great quarter. Let's be honest, it was a disappointment,” said Adam Steinberg, an analyst with Morgan Joseph. “I think everyone looked at the third quarter and thought that they were moving ahead a little faster with their turnaround.”

Lehman Brothers analyst Jane Pedreira said Trump's new management team should be given more time because the company had not completed its hirings in the fourth quarter.

“I didn't think the quarter was meaningful,” Pedreira said. “It was almost like, ‘Who cares?' It's not anything that reflects on the current management. They were still in the process of hiring people. They didn't have their marketing people in place yet.”

Mark Juliano, Trump Entertainment's chief operating officer, said the company's exit from Chapter 11 bankruptcy protection last May made for difficult comparisons between the fourth quarters of 2005 and 2004.

Juliano noted that Trump is dealing with the challenges of a new marketing strategy that focuses more on lucrative overnight guests than low-rolling daytrippers who are lured to the casinos by promotional giveaways.

“We began the process of making the necessary operating and cultural changes at our properties with the expectation it would take approximately 18 months before we would see the full benefits,” Juliano said in a statement.

For the quarter, Trump Entertainment lost $22.1 million, or 73 cents a share, on net revenue of $234.7 million. In the fourth quarter of 2004, it lost $99.8 million, or $3.34 per share, on net revenue of $236.7 million.

Revenue declines at Trump Plaza Hotel and Casino and Trump Marina Hotel Casino were the primary reason for the unprofitable quarter. Gaming revenue was up at the flagship Trump Taj Mahal Casino Resort.

“The Plaza was a surprise,” Steinberg said. “I think everyone thought that the Plaza would do better than it did.”

James B. Perry, Trump Entertainment's president and chief executive officer, said construction disruptions at the Plaza likely caused business to fall.

“The Plaza is basically being totally refitted,” Perry said, adding that improvements are being made to the casino floor, hotel suites and a restaurant.

Construction has started on a $110 million facelift of the three casinos, to be followed by a June groundbreaking on an 800-room tower at the Taj Mahal. The tower, scheduled to open in 2008, is the centerpiece of the company's expansion plans.

Trump previously announced plans for the tower and renovations for all three casinos, but Perry provided new details Thursday about crucial aspects of the projects. He disclosed that the tower's price tag will exceed $150 million and that construction will begin this fall on a new Boardwalk facade for Trump Plaza.

Looking outside Atlantic City, Trump Entertainment hopes to open new casinos in Philadelphia and possibly Las Vegas and Rhode Island in the next few years and will consider expanding overseas as part of an ambitious growth strategy, Perry said.

Trump's proposed $350 million Philadelphia slots parlor likely would start operations in 2008, but new casinos in Las Vegas and Johnston, R.I., probably would not open before 2010, Perry said. The Philadelphia and Johnston projects depend on Trump winning government approvals from Pennsylvania and Rhode Island.

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