WYOMISSING, Pa. (AP) -- Penn National Gaming said Thursday that its fourth-quarter net income dropped 54 percent, pressured by higher operating expenses.
The results missed expectations, but investors seemed to focus on its plans for a real estate investment trust and shares rose in afternoon trading.
The casino and racetrack operator, which announced in November that it plans to split its business into two public companies, earned $20.2 million, or 19 cents per share, for the three months ended Dec. 31. That's down from $44 million, or 41 cents per share, a year ago.
Excluding development costs and other items, earnings were 28 cents per share. Analysts surveyed by FactSet expected earnings of 47 cents per share.
Operating expenses rose to $670.5 million from $570.5 million.
Revenue climbed 10 percent to $743.8 million. Wall Street forecast $754 million in revenue.
For the year, Penn National Gaming Inc. earned $212 million, or $2.04 per share. In 2011 the Wyomissing, Pa., company earned $242.4 million, or $2.26 per share.
Annual revenue increased 6 percent to $2.9 billion.
Penn National now expects 2013 earnings of $2.47 per share, down from $2.62 per share. Revenue is now anticipated at approximately $3.15 billion. Its prior outlook was for revenue of $3.2 billion. Analysts predict full-year earnings of $2.64 per share on revenue of $3.25 billion.
The company sees first-quarter earnings at 64 cents per share on revenue of $799.2 million. Wall Street forecasts 72 cents per share on revenue of $839.8 million.
Penn National Gaming Inc. said in November that it plans to spin off its real estate assets into a real estate investment trust. Its gaming business will then stand alone. The split is subject to gambling regulatory approval. The company expects to complete the spinoff of the REIT in the second half of 2013.
For its proposed REIT, Penn National raised 2013 earnings guidance to $1.38 per share from $1.17 per share. Revenue is still expected at $608.3 million.
The company lowered forecasts for the stand-alone gambling business. Its 2013 earnings are now expected at $1.24 per share on revenue of $2.98 billion, down from $1.29 per share on revenue of $3.04 billion.
Carlo Santarelli of Deutsche Bank said in a client note that while the fourth-quarter results were disappointing, the revised 2013 outlook is now in line with recent expectations. That, along with a better dividend guidance for the REIT, should help to buffer any potential stock decline, he said.
Shares of Penn National Gaming rose $1.74, or 3.6 percent, to $49.66 in afternoon trading. In the past year the stock has traded in a range of $37 to $51.98.