PENN 1Q2012 REPORT CARD

In an effort to evaluate performance and as a follow up to our YouTube, we compare how the quarter measured up to previous management commentary and guidance.


  • GUIDANCE
    • BETTER – PENN exceeded 1Q EPS guidance by $0.18. They raised FY 2012 EPS guidance by 26 cents to $2.48.
  • CONSUMER SPENDING
    • SLIGHTLY BETTER– Management had indicated on their Q4 call that they weren’t sure whether the consumer was back.  On this call they said they feel better about the consumer, particularly in Las Vegas, and saw a slight uptick in spend per visit. However, revenues were only slightly better than expected.
  • MARGINS
    • MUCH BETTER – PENN was expecting declining margins in those properties where cannibalization was taking place.  Instead, 1Q margins improved even in the face of competition as PENN reduced VIP marketing spend and saw improved margins at the lower end of their database.  Margin improvement drove most of the EPS upside.
  • CANNIBALIZATION
    • BETTER – Cannibalization was not as high as what PENN had originally thought from Maryland Live!, Kansas Speedway, and Rivers Casino in Illinois.
  • SIOUX CITY LITIGATION
    • SAME– FY 2012 guidance assumes no disruptions to Argosy Sioux City amid ongoing negotiations with the City of Sioux City. Still hoping for mid-year resolution 
  • CASINO RAMA 
    • BETTER – FY 2012 guidance includes an extra quarter of management fees

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