AFTER LA BYD’S #S LOOK EVEN BETTER

After predicting a consensus beating Q1, our projection is now even higher following the release of the March Louisiana numbers.

Louisiana released March gaming revenues yesterday and BYD performed much better than expected.  We had already predicted a strong quarter in our 04/13/12 note “THE REGIONALS: Q1 THOUGHTS”, but we’re upping that projection.  Our Q1 EPS and EBITDA estimates are now $0.12 and $133 million versus consensus of $0.08 and $126 million, respectively.  On their Q4 conference call, BYD provided Q1 guidance ranges of $0.06-0.09 for EPS and $120-127 million for EBITDA.

BYD will report earnings next Tuesday morning.  As always, Q1 earnings will not be the only story.  BYD should provide Q2 guidance on the conference call.  We’re above the Street for Q2 as well - $0.12 vs. $0.11 – but we expect management will once again be conservative with their guidance.  Accurate guidance should be in the $0.11-0.14 range but something lower like $0.09-$0.12 is more likely.

As measured by sell side ratings, BYD remains an underappreciated stock.  Our long-term thesis for domestic gaming is not positive but with BYD’s operational and financial leverage, better demand trends in the LV locals market and some of the regional markets should drive potentially significant EPS upside over the remainder of 2012.