Gaming Segment To Aid Churchill Downs (CHDN) In Q2 Earnings
Zacks Investment Research | Jul 25, 2019 06:48AM ET
Churchill Downs Incorporated (NASDAQ:CHDN) is scheduled to report second-quarter 2019 results on Jul 31, after the market closes. In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 57.5%. Also, its bottom line outpaced expectations in each of the last four quarters, the average being 21.3%.
Q2 Expectations
The Zacks Consensus Estimate for the company’s second-quarter earnings is pegged at $2.97, indicating a 15.6% increase from the year-ago quarter’s reported number. However, over the past 30 days, its earnings estimates have witnessed downward revisions. For quarterly revenues, the consensus mark is pinned at $477.4 million, suggesting 25.8% growth from the prior-year quarter’s reported figure.
Let’s delve deeper to find out how the company’s top and bottom lines will shape up this earnings season.
Factors Likely to Aid Q2 Results
Churchill Downs relies heavily on acquisitions that are likely to have aided its overall results in the second quarter. The company is also gaining from rise in gaming revenues, which are likely to have strengthened its top line in the second quarter of 2019.
In the first quarter of 2019, gaming revenues increased 51.4% year over year, whereas total revenues grew more than 40%. The company’s gaming segment, including the addition of the Presque Isle Downs & Casino in Erie, has driven substantial revenues and is likely to have aided second-quarter results. We believe that various marketing strategies to expand presence among customers have helped it witness top-line growth in the second quarter.
Meanwhile, despite higher operating expenses, strong top line, and growth in adjusted earnings before interest, tax, depreciation and amortization (EBITDA) are likely to have driven significant profits in the quarter to be reported.
What Does the Zacks Model Say?
Our proven model does not conclusively predict that Churchill Downs is likely to beat earnings estimates in the second quarter. This is because a stock needs to have — a positive Zacks Investment Research
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