These earnings were achieved at a time when Pinnacle, as well as other developers, faced an increase in development and construction costs, corporate costs, and other write-off and miscellaneous charges, though these costs were offset by an increase in capitalized interest and an income tax benefit that resulted from a prior years' tax-related settlement.
Pinnacle also pushed many developments into and through the pipeline during this quarter, resulting in significant progress to: the $507-million Lumiere Place casino hotel that is set to open in Downtown St. Louis, on Dec. 19; the 565 acres of land in Baton Rouge, LA, that the company is prepping for hotel and gaming entertainment projects called Riviere and Casino Riviere; and the former site of the Sands Casino Hotel in Atlantic City that was imploded on Oct. 18 to make way for a larger casino resort that the company anticipates will open in late 2011 or early 2012.
The company's Q3 profits also reflect the gains from Pinnacle's December 2006 acquisition of the President Riverboat Casino in Downtown St. Louis, and a record quarter at L'Auberge du Lac in Lake Charles, LA, which is undergoing a 250-guestroom expansion. L'Auberge generated $84.5 million in revenue during the third quarter, resulting in a 6.7% increase over the $79.2 million it achieved at the same time last year.
One of the interesting points about Pinnacle's third-quarter revenue is that it was able to generally keep pace with its third-quarter revenue from 2006, which was $237 million. Last year's revenue was partially supplemented by the effects the 2005 and 2006 hurricanes had on Pinnacle's properties.
Pinnacle's Boomtown New Orleans did particularly well for the first nine months of 2007 as it exceeded all of its prior-year periods except for 2006 when the property performed extraordinarily well. This was due to the casino being one of the only ones open for several quarters after Hurricanes Rita and Katrina.
Coming off of hurricane-related profits and claims, Pinnacle's 2007 results "compare favorably," according to the company, to the periods before the hurricanes.
Other projects Pinnacle has in the works is the Sugarcane Bay resort in Lake Charles that is set to begin construction in the first quarter of 2008 and the new hotel at Boomtown New Orleans that is expected to break ground in the first half of 2008, among others.
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