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Overview of Pinnacle Entertainment’s 3Q14 results

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Highlights of 3Q14 results

Pinnacle Entertainment, Inc. (PNK) reported financial results for the third quarter ended September 30, 2014. The company had net revenues of $568.3 million, up 35.7% year-over-year and adjusted earnings before interests, taxes, depreciation, and amortization (or EBITDA) of $141.5 million, up 38% year-over-year. Adjusted EBITDA margin increased by 42 basis points, to 24.9%.

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Operating income increased by $92.4 million, to $77.2 million, in the third quarter of 2014, compared to operating loss of $15.2 million in the prior year period. Income from continuing operations increased by $54.8 million, to $7.7 million, in the third quarter of 2014, compared to a loss of $47.1 million in the prior year period. Adjusted income per share increased by 25.0%, to $0.20, in the third quarter of 2014, from $0.16 in the prior year period.

Casino acquisition

On August 14, 2013, Pinnacle Entertainment (PNK) completed its acquisition of Ameristar Casinos, Inc. in a deal valued at $2.8 billion. It should be noted that net revenues, including adjusted earnings figures mentioned above for year-over-year comparison, assumes that Ameristar Casinos was part of Pinnacle Entertainment from July 1, 2013, through August 12, 2013.

Recent deals in the casino space include Scientific Games’ (SGMS) acquisition of WMS Industries and Bally Technologies’ (BYI) acquisition of Shuffle Master in 2013. To know more, read the article Why casino operators look for industry consolidation.

Exchange-traded funds (or ETFs) like VanEck Vectors Gaming (BJK) and Consumer Discretionary Select Sector Standard & Poors depositary receipt (or SPDR) fund (XLY) helps investors gain exposure to casino companies.

In this series you will learn about the following:

  • Why Pinnacle Entertainment’s revenues increased
  • Pinnacle Entertainment’s segmental performance
  • Why Pinnacle Entertainment is able to increase its free cash flow
  • Pinnacle Entertainment’s announcement of separation plans
  • Will Pinnacle Entertainment’s stock bounce back?
  • Pinnacle Entertainment’s forward valuation

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