Boston, MA 05/08/2014 (wallstreetpr) – Increased costs of doing business seems to be catching up with the largest operator of Casinos in Atlantic City, Caesars Entertainment Corp (NASDAQ:CZR). The mega Casino operator is now looking for ways to reduce its capacity amidst the struggling casino markets. Caesars has been trying for some time to remain solvent as glut of casinos continues to pile pressure with weak consumer spending worsening the situation.
Caesars Closing Property
Caesars announced in March that it was planning to close properties in Tunica Mississippi as one of the ways of reducing operational costs. This move according to the company’s chief executive officer could set precedence for closures in other markets, which have been reporting dismal earnings. Caesar has already reduced costs by reducing the amount of working hours in some of its restaurants.
The revelations come as Caesars Entertainment Corp (NASDAQ:CZR) reported a widened net loss of $386.4 million for the first quarter, up from $217.6 million reported for the same period last year. A widened loss for the quarter was heavily affected by a 1.9% slump in sales for the quarter that came in at $2.1 billion. Continued weaknesses in the U.S, Midwest and Atlantic Coast, continues to significantly affect returns on investments.
Caesars Generating Less Cash
The biggest challenge circles around the fact that the company generates less cash than it needs to service its debt. To stay solvent, Caesar’s has sold some of its assets, transferred properties and refinanced part of its debt. Las Vega continues to remain the brightest spot for the company seen by 5.6% growth in revenue at $794 million.
Las Vegas performed better on Hospitality categories but was, on the other hand, affected by extreme weather conditions and softness in visitations that affected regional business trends. Caesars Entertainment Corp (NASDAQ:CZR) has already rolled out plans to counter its financial problems by announcing minority investment in its largest unit. The new plan is aimed at restructuring the $23 billion long term debt and expected to eliminate up to $1 billion in obligations that are due in 2015.
