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Could be a mixed bag but given the calendar and weather, they should’ve done better.

Given the favorable Q1 calendar, we thought the regional markets would’ve performed better.  With the exception of BYD and maybe PNK, Q1 earnings/EBITDA are likely to come in-line or even down for the regional gaming operators.  Q1 contained 3 extra weekend days, 91 days overall, due to Leap Year, and the weather was fantastic.  Remember that the Midwest was hammered with snowstorms last year in Q1.

THE REGIONALS: Q1 THOUGHTS - 33

BYD

BYD looks like the standout for Q1.  The Street’s $125 million EBITDA estimate looks light by about 5%.  We are still awaiting Louisiana’s results but it’s hard to imagine they will move the needle enough to prove the Street correct.  While BYD’s regional properties mostly had decent Q1s, the big properties made the difference this quarter – LV locals, Borgata, and even Downtown LV.  On an EPS basis, the Street is at $0.08, guidance was for $0.05-0.09, but we think $0.11 is more likely.

ASCA

ASCA looks like the loser this quarter.  We think the company could miss EBITDA expectations by $2 million for Q1 and EPS by $0.03.  ASCA is a good operator with well maintained, quality facilities.  However, we think they are more a victim of sluggish market conditions, new competition in the Kansas City market, and high gas prices. 

PNK

Louisiana supplies most of PNK’s EBITDA and since that state hasn’t reported March gaming revenues yet, it’s difficult to make a call on Q1 earnings.  Their other properties appear to be tracking ahead of the Street.  It’s subject to change, but we think Q1 EBITDA could come in 2-3% higher than the Street’s $68 million estimate and EPS 1c above the Street’s $0.20 EPS estimate.  River City has been the positive differentiator so far.

PENN

PENN looks in-line to us, which is actually a disappointment.  After a better than expected January and February, PENN was cruising for a sizable beat.  March was weak for them, particularly in Illinois where they have too much exposure, and in Kansas City.  Their new property in Kansas has experienced disappointing results in its first two months while cannibalization of their Riverside casino on the Missouri side has been higher.