Red Rock Resorts Records Strong Q4 Performance

Posted on: February 7, 2024, 05:50h.

Last updated on: February 7, 2024, 05:50h.

Shares of Red Rock Resorts (NASDAQ: RRR) surged in the after-hours trading session on Wednesday after the gaming company reported better-than-expected fourth-quarter results, and also declared a special dividend.

Red Rock
Red Rock Resort in Summerlin, Nevada. The operator posted strong Q4 results and announced another special dividend. (Image: Fodor’s Travel Guide)

The operator of the Station casinos, among others, reported earnings of 95 cents a share on revenue of $462.7 million in the final three months of 2023. Analysts had projected earnings of 51 cents on sales of $439.6 million. Red Rock’s top line increased 8.8% year-over-year, while adjusted EBITDA rose by 3.6%.

Net revenues from Las Vegas operations were $459.4 million for the fourth quarter of 2023, an increase of 9.5%, or $39.7 million, from $419.6 million in the same period of 2022,” according to a statement issued by the company. “Adjusted EBITDA from Las Vegas operations was $220.3 million for the fourth quarter of 2023, an increase of 6.5%, or $13.4 million, from $206.9 million in the same period of 2022.

The gaming company operates various properties in the Las Vegas area, including the namesake venue in Summerlin and the Green Valley Ranch in Henderson. Red Rock also manages 10 Wildfire casinos, with all gaming venues located in the Las Vegas Valley.

Red Rock Resorts Delivers More Income

Red Rock ended 2023 with $137.6 million in cash on hand and outstanding debt of $3.4 billion. The strong balance sheet enabled the company to support the new special payout.

“The Company’s Board of Directors has declared a special dividend of $1.00 per Class A common share. The dividend will be payable on March 4, 2024 to all stockholders of record as of the close of business on February 22, 2024,” in the company’s statement.

This marks the operator’s third special distribution since November 2021. A $3 per share special dividend was announced in the same month, and followed by a $1 per share payout a year later.

One-off payments, or special dividends, provide flexibility as they are not delivered quarterly, offering an alternative option to traditional distributions by domestic companies.

Durango Might Have Helped Red Rock Q4 Results

Durango Casino & Resort, the operator’s newest casino hotel in Southwest Las Vegas, was only open for a few months so it was not a major factor in the company’s Q4 results, but did make a notable contribution.

Of note is that Durango did not cannibalize other Red Rock properties, contrary to previous concerns. Executives believe that loyal patrons of the operator’s namesake venue in Summerlin are likely to return in 2024.

Industry analysts suggest Durango’s strong performance poses greater risk to casinos operated by rivals in Southwest Las Vegas than it does to other Red Rock properties.

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