Churchill Downs says gambling websites will power revenue growth
During a morning conference call, Churchill Downs Inc. (Nasdaq: CHDN) executives said the horse racing company’s second-quarter revenue was boosted by gambling websites and television channels. Because the second quarter included the Kentucky Derby, CEO Robert Evans said Churchill Down’s quarterly wagering revenue will likely not be indicative of future quarters this year, but the firm’s new gambling websites will still increase revenue.
“During the second half of the year, we look forward to further growth in our account-wagering business, to adding slot machine gaming to our product offerings in Louisiana, and to making further progress on reducing our overall cost structure,” he said during the call.
During the quarter, the company launched a new gambling website, TwinSpires.com, and acquired three other websites – WinTicket.com, BrisBET.com and TsnBET.com.
After Tuesday’s close, Churchill Downs reported revenue of $169.9 million for the second quarter ended June 30, up from $163.3 million a year earlier. The firm’s quarterly earnings were $29.5 million, or $2.12 per share, compared with $34.8 million, or $2.56 per share, during the same period of 2006. The results were adversely affected by five fewer racing days during the quarter, compared with last year’s second quarter.
The company’s 2007 second-quarter profits were damaged when it collected a $10 million insurance payment to cover hurricane damage to race tracks in New Orleans and Miami.
Evans said the company doesn’t know if it will be able to add slot machine gaming at its track in Arlington Park, Ill.
“All I can tell you is the subject of expanded alternative gaming has been discussed in the legislature, and I’m not going to make an effort to predict what the outcome will be,” he said.
Evans also said the company plans to spend $30 million over the next two years to build new facilities in New Orleans.
In morning trading, shares are up $1.92, or 3.99%, at $50. Over the last 52 weeks, shares have ranged between $36.54 and $54.87.
