Fold: Caesars Entertainment (CZR)
The Ides of March were famously unfortunate for Julius Caesar nearly two millennia ago. His casino stocks namesake, Caesars Entertainment (CZR), didn’t fare a whole lot better, as CZR stock lost 7% leading up to last week’s anniversary.
Disappointing earnings were to blame for last week’s slide: CZR stock reported a quarterly loss of $12.83 a share — far worse than the $1.49-cent loss Wall Street expected and more than triple the $3.75 loss the company reported for the same quarter in 2012. CZR’s $2.08 billion in revenue was a much narrower miss — analysts had expected $2.12 billion.
While CZR’s Vegas business improved during the quarter, its Atlantic City profits crashed and burned, while sales of Bally’s Las Vegas and The Quad to majority-owned Caesars Growth Partners triggered a loss in the quarter of $1.75 billion.
CZR stock is down nearly 11% since March 4. The biggest challenges it faces are a back-breaking debt load and minimal exposure to the sector’s highest growth plays. CZR has total debt of some $23 billion, and Chairman and CEO Gary Loveman has admitted that the decision not to enter white-hot Macau was a missed opportunity.