Caesars Entertainment Corporation (NASDAQ:CZR) is scheduled to report second-quarter 2016 financial numbers on Aug 2, after market close.
Notably, the company’s trailing four-quarter average earnings surprise stands at a negative 20.02%.
Let’s see how things are shaping up for this announcement.
Factors Likely to Influence this Quarter
Caesars Entertainment has not been able to rake in profits for a long time owing to its high debt levels which have been driving interest expenses. We expect the trend to continue in the second quarter.
Notably, last year, Caesars Entertainment’s bankrupt unit Caesars Entertainment Operating Co. (CEOC) filed for reorganization under Chapter 11 of the United States Bankruptcy Code.
However, despite following the restructuring plan, the company has not been able to improve its debt position. In fact, costs related to these initiatives have hurt profits and we expect the same to affect results in the to-be-reported quarter.
Nevertheless, this gaming company is spending heavily on renovation of properties to boost traffic. It is enhancing hospitality and entertainment assets in the high-growth markets, such as Las Vegas which has been witnessing strong visitation pattern and high occupancy rates. Given the optimism surrounding tourism in this region, we expect the properties to augment second-quarter revenues.
Investments in new and exciting hospitality amenities and the spending on its Caesars Interactive Entertainment (“CIE”) unit should further boost results. Meanwhile, efforts to cut expenses through cost saving initiatives should continue to aid margin expansion in the to-be-reported quarter.
Stocks to Consider
Here are some companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Red Lion Hotels Corporation (NYSE:RLH) has an earnings ESP of +100.00% and a Zacks Rank #3 (Hold).
Vista Outdoor Inc. (NYSE:VSTO) has an earnings ESP of +2.94% and a Zacks Rank #3.
Wynn Resorts Ltd. (NASDAQ:WYNN) has an earnings ESP of +1.03% and a Zacks Rank #3.
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