Caesars Entertainment announced it will release its Q4 results on Feb. 25 at 5 PM ET. Ahead of the reveal, J.P Morgan analyst Joseph Greff disclosed he's lowering his Q4 prediction from $499 million to $485 million, a $14 million decrease. That's a slight drop from $489 million in Q4 2023.
Greff highlighted several reasons for the changed prediction, including decreases in gambling volume and an average table game hold of 22%. However, he also noted poor returns from the 2024 Las Vegas Formula 1 Grand Prix. Turnout for the race was lower than last year.
Caesars Entertainment CEO Tom Reeg spoke about his support for the race after it debuted in Nov. 2023:
"Generally speaking, it was a phenomenal event for the market. It needs to get – obviously, that was the first year of the Grand Prix in Las Vegas. It was a gargantuan effort to pull off a race at all as with anything of that scale where you launch, you learn, what would I do differently as we move forward. We know as Caesars that this will be a better event when more of the city is energized, not just the four or five buildings that garnered the brunt of the benefit."
Another area Greff discussed was a prediction for Caesars' poor Q4 sports betting performance. Thanks to bettor-friendly results, October sports wagering revenues dropped across several US states. Greff also suggested favored teams tend to win more and cover the spread in December, the reason he revised his prediction for this segment from $51 million to $26 million. If Greff is correct, it would mark back-to-back quarterly revenue declines for Caesars to close out the year.
A Mixed Year for Caesars Entertainment
Caesars struggled throughout 2024, even considering selling its non-core assets after missing the mark with its Q1 earnings. Q2 was more positive, with year-on-year growth in adjusted EBITDA in its Las Vegas assets.
However, Q3 saw a $9 million loss. Still, Reeg saw reason for optimism as net income increased from $4 million in Q2 to $11 million in Q3, boosted by the online sports betting and casino segment. That helped Caesars hit a $52 million, quarterly record high adjusted EBITDA.
Reeg said, “I think the future is very bright for our digital business. I think that business is going to end up generating a hell of a lot more than the $500 million target everyone has been wringing their hands about for the last three years. We feel very good about that.”
Moreover, Caesars opened a new casino in Virginia, Caesars Virginia, on Dec. 12.
“We have worked diligently on creating a world-class resort that will offer all the luxurious and modern amenities expected from Caesars that will also serve as an economic driver for Danville and the surrounding region through employment and tourism,” said Barron Fuller, regional president for Caesars Entertainment on the Caesars Virginia launch.