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Caesars Entertainment (CZR) posted an unexpected loss on Tuesday and offered a cautious outlook on the summer casino season, pushing its shares down more than 2% in after-hours trading.
The company reported $0.39 per share adjusted loss in the second quarter, compared to a $0.06 per share profit expected by analysts surveyed by FactSet. Revenue rose 3% to $2.91 billion, beating expectations of $2.86 billion.
Topline growth was supported by gains in he company's small but growing digital business, where sales rose over 24%. Net revenue from its core business in Las Vegas was down 3.7%
"Our Caesars Digital segment posted one of its strongest quarters ever, as momentum continues to build toward the financial goals that we originally laid out in 2021," CEO Tom Reeg said in a statement.
"In Las Vegas, we posted solid gaming results in the face of softer market demand in our hospitality verticals."
Reeg projected a "soft summer in Vegas," anticipating third-quarter performance to mirror Q2 results, with stronger business momentum likely to pick up starting in the fourth quarter.
Management highlighted that its strategic initiatives, including the push towards digital gameplay, will drive gains.
Caesars recently opened its third live-dealer online casino studio in the U.S., a new concept for live streaming blackjack and roulette to subscribers’ phones and computers.
On Stocktwits, the retail sentiment for Caesars shifted to 'extremely bullish' as of early Wednesday, from 'bullish' the previous day. Message volume surged 650% in the last 24-hour period.
CZR stock is down nearly 15% year-to-date, compared to the 8.4% gain in SPDR S&P 500 ETF (SPY), which tracks S&P 500 stocks.
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