Wednesday, casino operator Lakes Entertainment Inc. (LACO)reported a swing to profit for the second quarter from a loss a year ago, benefiting from improved top line growth and gains on notes receivable. The company's stock, however, took a plunge and is currently trading down 10% on the Nasdaq.
Net earnings applicable to the company were $2.82 million or $0.11 per share for the quarter, compared to a loss of $5.19 million or $0.21 per share in the year earlier period. Analysts polled by Thomson Reuters expected earnings of $0.06 per share for the quarter. Analysts' estimate typically exclude special items.
For the quarter, the company recorded earnings from discontinued operations of $2.82 million, compared to a loss of $2.39 million in the year ago quarter.
Total revenues rose 20% to $7.06 million from $5.89 million in the comparable period, primarily due to fees from the Red Hawk Casino which opened in December 2008. Analysts estimated revenues of $7.38 million for the quarter.
For the first half, net earnings applicable to the company was $3.85 million or $0.15 per share, compared to a net loss of $12.09 million or $0.49 per share in the corresponding period last year.
For the first six months, the company generated revenues of $14.3 million, up 37% from $10.45 million in the prior-year period.
Lyle Berman, chief executive officer of Lakes, said, "Although the uncertain economic environment in the California market continues to impact the Red Hawk Casino's ability to achieve consistently strong operating results, the casino does continue to experience strong visitor counts and we remain cautiously optimistic regarding the long-term operating results of this property."
LACO is trading at $3.33, down $0.37 or 10.00%, on a volume of about 59 thousand shares.
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