Harrah’s Reports Profit, Helped by Western Casinos

Casino company Harrah’s Entertainment Inc. said Tuesday that it swung to a first-quarter profit from a loss a year earlier when it wrote down the value of acquisitions. Earnings rose at its casinos in Nevada and New Jersey.

Harrah’s had net income of $81.8 million, or 75 cents a share, contrasted with a year-earlier loss of $6 million, or 5 cents. The loss in 2002 includes costs of $91.2 million to write down the value of acquisitions. Revenue rose 10% to $1.07 billion from $974.7 million.

In the first quarter of 2002, excluding acquisition costs, profit was $85.2 million, or 75 cents a share. In the latest quarter, earnings at its Midwest casinos fell 23%. The company cited a higher tax rate in Indiana, Illinois and Iowa.

“Their Achilles’ heel is the riverboat markets because of the higher taxes enacted last year, as well as increased competition in Louisiana, Illinois and Missouri,” said Joseph Greff, an analyst with Fulcrum Global Partners. He has a “neutral” rating on the stock.

Harrah’s shares rose $1.82 to $38.05 on the New York Stock Exchange.

Analysts expected profit of 67 cents a share, based on a Thomson First Call poll.

Earnings rose 2.6% at two casinos in Atlantic City as revenue generated by the addition of a hotel tower offset revenue lost to a snowstorm on the Presidents Day weekend.

Earnings at Harrah’s Western casinos rose 19%. In Southern markets including Louisiana, profit rose 35%, helped by the purchase of its partner’s stake in the Harrah’s New Orleans Casino.