PENN Entertainment (PENN) Q2 Earnings Lag Estimates, Fall Y/Y

PENN Entertainment, Inc. PENN reported mixed second-quarter 2022 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. The top line rose year over year, while the bottom line declined year over year. Following the results, the company’s shares dropped 4% during trading hours on Aug 5.

Earnings & Revenue Discussion

In the quarter under review, the company reported adjusted earnings per share (EPS) of 15 cents missing the Zacks Consensus Estimate of 51 cents by 70.6%. In the prior-year quarter, the company reported an adjusted EPS of $1.17.

During the second quarter, total revenues of $1,626.9 million beat the Zacks Consensus Estimate of $1,597 million by 1.9%. The top line increased 5.2% on a year-over-year basis. The upside was backed by solid retail operations, improved visitation and new interactive offerings.

Penn National Gaming, Inc. Price, Consensus and EPS Surprise

 

Penn National Gaming, Inc. Price, Consensus and EPS Surprise
Penn National Gaming, Inc. Price, Consensus and EPS Surprise

Penn National Gaming, Inc. price-consensus-eps-surprise-chart | Penn National Gaming, Inc. Quote

 

During the quarter, the Northeast segment delivered revenues of $684.9 million, up 5% year over year. The West, Midwest, Interactive and Other segments’ revenues were $153.8 million, $296.3 million, $154.9 million and $5.9 million, up 9.5%, 0.5%, 61.4% and 247.1% year over year, respectively. However, revenues in the south segment fell 8% year over year to $338.6 million.
Operating Headlines

Adjusted EBITDAR declined 14% from the year-ago quarter’s level to $504.5 million. Adjusted EBITDAR margin contracted 694 basis points year-over-year to 31%.

Other Financial Information

As of Jun 30, 2022, the company had cash and cash equivalents of $1,708.3 million compared with $1,805.5 million as of Mar 31, 2022. Bank debt as of Jun 30, 2022, was $1,550 million compared with $1,543.2 million as of Mar 31, 2022.

For the second quarter, the company repurchased 5,539,177 shares of its common stock worth approximately $167 million. The company stated the availability of $313.1 million under its $750 million repurchase program.

2022 Guidance

For 2022, the company anticipates net revenues in the range of $6.15-$6.55 billion. Adjusted EBITDAR for 2022 is expected in the range of $1.9-$2 billion.

Zacks Rank & Key Picks

PENN Entertainment currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the Consumer Discretionary sector are G-III Apparel Group, Ltd. GIII, Marriott International, Inc. (MAR) and Choice Hotels International, Inc. CHH.

G-III Apparel sports a Zacks Rank #1. GIII has a trailing four-quarter earnings surprise of 97.5%, on average. The stock has declined 23.5% in the past year.

The Zacks Consensus Estimate for GIII’s current financial year sales and EPS indicates an increase of 13.8% and 8.2%, respectively, from the year-ago period’s reported levels.

Marriott carries a Zacks Rank #2. MAR has a trailing four-quarter earnings surprise of 1.4%, on average. The stock has increased 12.2% in the past year.

The Zacks Consensus Estimate for MAR’s current financial year sales and EPS indicates growth of 46.1% and 99.4%, respectively, from the year-ago period’s reported levels.

Choice Hotels carries a Zacks Rank #2. CHH has a trailing four-quarter earnings surprise of 11.2%, on average. The stock has declined 4.4% in the past year.

The Zacks Consensus Estimate for CHH’s current financial year sales and EPS indicates growth of 13.6% and 17.7%, respectively, from the year-ago period’s reported levels.


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