Harrahs profit up 17 pct

By ADAM GOLDMAN ASSOCIATED PRESS WRITER LAS VEGAS -- Harrah's Entertainment Inc., which recently completed its $9 billion buyout of rival Caesars Entertainment Inc., said Thursday its second-quarter profit grew 17 percent as gambling increased across its chain of casinos. Shares of Harrah's fell $3.39, or 4.3 percent, to close at $75.20 in trading on the New York Stock Exchange, still near the high end of a 52-week range of $43.94 and $79.69. Net income rose to $105.8 million, or 84 cents per share, from $90.2 million, or 79 cents per share, a year ago. Adjusted earnings increased to 90 cents from 79 cents in the prior year. However, Harrah's profit missed the average estimate of 93 cents per share from analysts polled by Thomson Financial, causing shares to drop. Second-quarter results included 17 days of contributions from Caesars, which was acquired by Harrah's on June 13, allowing the company to maintain its position as the world's largest gambling company in terms of revenue. Quarterly revenue totaled $1.47 billion, up 42 percent from $1.04 billion a year earlier and beating analysts' consensus target of $1.42 billion. Caesar's casinos added $181.8 million in revenue. Gary Loveman, Harrah's chairman, chief executive officer and president, said in a conference call that the company had a strong plan to increase earnings. "We have a clear path to deliver an enhanced rate of earnings growth in the future," Loveman said. At casinos open for at least a year, revenue increased 8.9 percent, its largest gain in nearly five years, Harrah's said. Play tracked through its Total Rewards customer loyalty program rose 12.9 percent. Harrah's saw improved business in its North Central and South Central regions, where revenue rose by 44 percent and 66 percent respectively in the latest quarter. West region revenue inched up $500,000 to $385 million, while East expanded 6 percent to $205.3 million. Unseasonable weather hurt its operations in northern Nevada. But in Las Vegas, the World Series of Poker helped its Rio resort report record results, along with its two other Harrah's properties. Caesars Palace also notched solid results thanks to strong, high-end international table play and a higher percentage of money won from gamblers at table games, a casino metric known as "table hold." Caesars Palace is slated to open a new 949-room tower next week, a move that's intended to boost the financial prospects of the hotel-casino and the company as a whole. Caesars Palace sits on a Las Vegas Strip intersection that will become "the centerpiece of the Total Rewards program, creating the potential for tremendous long-term growth in the West Region," the company said. Steven Kent, a gambling analyst with Goldman Sachs, wrote in an investor's note Thursday that the industry might finally be showing some weakness. "Results represent one more gaming operator that just met or only modestly surpassed (second quarter) expectations providing further evidence that the gaming momentum over the last several quarters may be moderating," Kent wrote.