Trump reports smaller loss
Trump Entertainment Resorts called the results "a minor setback."
ATLANTIC CITY - With its three New Jersey casinos being eyed by potential buyers, Trump Entertainment Resorts Inc. said yesterday that its first-quarter loss shrank, despite increasing competition from slot-machine parlors in the Philadelphia area and New York.
The Atlantic City-based company reported a loss of $8.1 million, or 26 cents a share, in the three months ended March 31. That compared with a loss of $9.7 million, or 32 cents a share, in the year-earlier period.
The company, which operates the Trump Taj Mahal Casino Resort, the Trump Plaza Hotel & Casino, and the Trump Marina Hotel Casino, reported first-quarter revenue of $234.3 million, down from $237.7 million a year earlier.
Analysts surveyed by Thomson Financial said they expected, on average, a loss of 25 cents a share, and revenue of $238.5 million.
"The revenue decline due to new competition provided a minor setback," James B. Perry, the company's president and chief executive officer, said in a statement.
In March, Trump Entertainment Resorts hired Merrill Lynch & Co. Inc. to help it explore strategic alternatives, which could include a possible sale.
Wall Street is not rushing in with offers, wrote Prudential Equity Group L.L.C. analyst Joel Simkins.
"The market has perceived that there are few strategic buyers or positive outcomes for Trump given the current headwind of challenges facing Atlantic City," he wrote, adding that the stock has fallen nearly 11 percent since the Merrill Lynch announcement was made.
The company said it would discuss the earnings report only "at the conclusion of the previously announced Merrill Lynch engagement, or when the efforts of the engagement require further public disclosure."
Donald Trump is the company's chairman and largest stockholder.
Lower promotional spending was seen as a positive, along with capital-expenditure programs for the casino floors, room renovations and new restaurants.
Trump Entertainment Resorts continues to labor under significant debt, but the company said it had trimmed the figure by $4.9 million over the first quarter to just over $1.4 billion.
Positive developments cited by the company included a 12 percent increase in revenue from hotel rooms, food and beverages from cash-paying customers, and a drop in payroll costs of nearly 5 percent.
Shares of Trump Entertainment closed at $15.61, down 84 cents, or more than 5 percent. It has traded from $15.97 to $23.80 over the last year.