Racetrack/gambling company Churchill Downs released fourth quarter and year-end results Monday that dramatically illustrate its shift away from horses.
For the quarter that ended Dec. 31, Louisville-based Churchill reported a net loss of $1.9 million, a much smaller loss than the $6.9 million reported in the same quarter of 2009. Churchill reported a loss of 12 cents a share for the quarter.
But net revenue from continuing operations was up for the quarter, Churchill said, in part because of the positive effect of hosting the Breeders' Cup Thoroughbred championships, which will be at Churchill again this year.
For the year, net earnings were down 3 percent, to $16.35 million, compared to $16.82 million in 2009. Net earnings per share were down 13 percent, to $1.06 in 2010, from $1.22 in 2009.
Earnings from racing operations were essentially flat, at $35 million, for the year.
The growth came from Churchill's online advance-deposit wagering platform, TwinSpires.com, and from its gambling segment.
Online business grew 23 percent, to $17.2 million for the year, and gaming grew 56 percent, to $28.5 million. Together, the two sectors now top Churchill's racing business.
In a release about the earnings, Churchill attributed revenue growth to the Calder Casino, which opened Jan. 22, 2010, in Florida, as well as improved results from Fair Grounds' slot machine gambling facility in New Orleans and the addition of Harlow's Casino Resort and Hotel in Mississippi, acquired in December.
The online sector was boosted by the acquisition of Youbet.com in June. Youbet has been integrated into TwinSpires.com, giving Churchill the lion's share of the advance-deposit wagering market.
Churchill president and CEO Robert L. Evans praised the online and gambling growth but said racing still has problems.
"We still face a number of challenges as we work to improve the results of our racing operations, including nationwide declines in handle and intense competition for racehorses with tracks that are able to subsidize their purses with alternative gaming revenues," Evans said in the release.
"The results from last year's Kentucky Derby, Kentucky Oaks and the Breeders' Cup World Thoroughbred Championships at Churchill Downs racetrack demonstrate to us that racing fans will support a high-quality racing product that is packaged with an exceptional entertainment experience, and we continue to focus on producing racing that customers want. Our sales of reserved seats for this year's Derby and Oaks are trending ahead of last year, as are sales of premium seats to Churchill Downs' opening night event on April 30."
Evans will discuss the financial results at 9 a.m. Tuesday in a webcast available at IR.churchilldownsincorporated.com/events.cfm.
