Penn Entertainment follows ESPN deal with an earnings beat
By Tomi Kilgore
Sports betting company revenue rises above forecasts, as food, beverage and hotel growth offset gaming decline
Penn Entertainment Inc. followed up its announcement of a deal with ESPN with a second-quarter report in which profit and revenue rose above expectations, as strength in its food, beverage and hotel business offset some weakness in gaming.
The online-sports-betting and gaming facilities company's stock PENN soared 16.3% toward a three-month high in premarket trading Wednesday, on the back of the ESPN-branding deal and the sale of its Barstool Sports stake. That puts it on track for the best one-day performance since it jumped 18.1% on July 15, 2020.
The company reported early Wednesday second-quarter net income that more than doubled, to $78.4 million, or 48 cents a share, from $26.1 million, or 15 cents a share, in the same period a year ago. That beat the FactSet consensus for earnings per share of 42 cents.
Revenue grew 2.9% to $1.675 billion, above the FactSet consensus of $1.665 billion.
Gaming revenue fell 2.5% to $1.29 billion, while food, beverage, hotel and other revenue jumped 26.8% to $382.0 million.
"The company experienced stable property level performance this quarter with each month showing sequential improvement," said Chief Executive Jay Snowden. "Additionally, we are excited to have successfully re-launched our sportsbook app, which features major product improvements that significantly upgrade the user experience, including streamlined navigation, faster load times, expanded wagering markets, enhanced promotions and deeper media integrations."
The company said late Tuesday that it divested 100% of its stake in Barstool Sports, and said its current Barstool Sportsbook will be rebranded as ESPN Bet in the fall of 2023.
The stock has lost 16.4% year to date through Tuesday, while the S&P 500 index SPX has advanced 17.2%.
-Tomi Kilgore
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(END) Dow Jones Newswires
08-09-23 0846ET
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