Caesars Entertainment has been largely unscathed by reaction to the coronavirus outbreak, which has caused a dramatic two-day pullback on Wall Street, company officials said.
While Caesars is keeping a watchful eye on the situation with the virus, CEO Tony Rodio said today the Las Vegas-based gaming company has avoided any significant business impact.
“Our bigger concern going forward, depending upon which way this coronavirus goes, is if we start to see cancellations of domestic travel to Las Vegas for the fear of interacting with Asian clientele,” Rodio said during a quarterly earnings call. “We have not seen that to date. Obviously, we haven’t had any cases of the coronavirus in Las Vegas.”
A day after falling more than 1,000 points, the Dow Jones Industrial Average fell 879 points today, largely over coronavirus fears.
The virus, which originated last year in China, has infected nearly 80,000 people worldwide and resulted in more than 2,500 deaths, mostly in China.
Also today, Caesars reported 2019 fourth-quarter net revenues of $2.17 billion, an increase of nearly 3% over the same quarter in 2018. That’s despite a quarterly drop in net income from $198 million in the fourth quarter of 2018 to a loss of $304 million in the final quarter of 2019.
Company EBITDA — earnings before interest, taxes, depreciation and amortization — jumped nearly 3% during the quarter to $583 million.
Those gains were partially due to a decrease in payroll, professional service and legal costs, Rodio said. Since the start of 2019, Rodio said, Caesars has trimmed about $100 million in expenses.
For 2019, Caesars posted an increase of more than 4% in net revenues — $8.7 billion — though net income was down significantly — a loss of $1.2 billion.
In the Las Vegas market, Caesars posted net revenues of $989 million for the fourth quarter of 2019, up $40 million from the same period in 2018.
Rodio said higher revenue figures in Las Vegas were driven largely by growth in the company’s hotel business, which jumped just over 3% — $9 million — quarter-over-quarter.
“We saw a higher cash customer mix versus the prior year and an increase in occupancy,” Rodio said. “We’re excited about the opening of Caesars Forum in Las Vegas in March.”
The new conference and events center has already booked more than $100 million of business for its anticipated first full year of operation, he said.
Gaming revenues in Las Vegas increase just over 1% during the fourth quarter of 2019, Caesars Chief Financial Officer Eric Hession said.
The merger between Caesars and Reno-based Eldorado Resorts is still on track to close in the first half of this year, Rodio said.