Pinnacle Entertainment Earnings: Here’s Why Investors are Selling Shares Now

Pinnacle Entertainment Inc. (NYSE:PNK) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 3%.

Pinnacle Entertainment Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 90% to $0.03 in the quarter versus EPS of $0.26 in the year-earlier quarter.

Revenue: Rose 9.36% to $301.6 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Pinnacle Entertainment Inc. reported adjusted EPS income of $0.03 per share. By that measure, the company missed the mean analyst estimate of $0.14. It missed the average revenue estimate of $306.41 million.

Quoting Management: Anthony Sanfilippo, President and Chief Executive Officer of Pinnacle Entertainment, commented, “2012 was another year of significant operational, financial and strategic accomplishments for Pinnacle Entertainment and we are very pleased with the progress made by our Company in the year. We continued to execute on revenue growth and operational improvement initiatives in 2012, with revenues increasing 4.9% to a record $1.2 billion, Consolidated Adjusted EBITDA up 13.1% to a record $285.2 million and our margins expanding 173 basis points, also to record levels. Lake Charles and St. Louis were key drivers behind this performance, with each segment generating record annual revenues, Adjusted EBITDA and Adjusted EBITDA margin in 2012. The strong operating results we delivered in 2012 came in spite of abnormally low table hold across our Louisiana properties and a general softening in business volumes our industry began to experience during the fourth quarter.”

Key Stats (on next page)…

Revenue decreased 0.85% from $304.18 million in the previous quarter. EPS decreased 90% from $0.30 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.27 to a profit $0.29. For the current year, the average estimate is a profit of $1.08, which is the same with that ninety days ago.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)