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No impact from oil spill and impact may turn out to be a positive. This isn’t an original call today; but earnings visibility is good, management continues to do the right things, and the stock has gotten creamed.

PNK management is making sure people know that the impact from the Gulf oil spill is nonexistent and could actually turn out to be a a positive if the relief workers gamble as they have in the past.  This clears up the near-term earnings picture which we had thought was good, prior to the BP disaster.  Meanwhile, the stock is off 24% from its recent high only one month ago and now trades at 6.5x 2011 EBITDA.

Aside from chronic unemployment, the only negative to the story, at least relative to initial expectations, is the April performance of River City (RC).  RC generated only $13 million in gaming revenues in April after putting up a solid $15.9 million in March.  We expect RC to rebound somewhat in May and build from there.  However, we have taken our numbers down to reflect a slower ramp.

Despite lower projections for RC, we remain above the Street in company EBITDA.  For 2010 we are projecting $206 million in EBITDA versus the Street at $203 million.  Since we wrote our note “PNK: ANOTHER CALL FOR HIGHER ESTIMATES” in late April, the Street has come up from its $192 million. Margins remain the story on EBITDA.  The removal of Dan Lee expenses in corporate and the sustainable cost cutting and rationalization generated in Q1, especially in the marketing area, provide visibility and maybe upside to current estimates.