Casino giant Harrah's Entertainment Inc. said Thursday that its profits for second-quarter rose because of solid consumer demand, however its stocks dropped because planning and development expenses caused it to miss Wall Street expectations.
Harrah's said its net income rose 22 percent compared to last year's $128.6 million or 69 cents per share. Adjusted earnings per share from continuing operations rose 10.5 percent, to 95 cents, from 86 cents in last year's second quarter.
A previous Thomson Financial poll of analysts yielded an expected earnings of $1.02 per share.
Harrah's shares fell 4.3 percent or $2.75, to $61.10 in afternoon trading on the New York Stock Exchange.
"I understand that our quarterly results were below consensus estimates, an outcome I am never pleased with," Harrah's chief executive Gary Loveman told a conference call with analysts.
"In this case, however, the difference is due largely to expenditures undertaken to ensure that we come out with high-quality, innovative development concepts that tie our properties together in an innovative fashion in Las Vegas and in Atlantic City," he added.
"The good news is we have lots of opportunities to grow, the bad news is it costs a lot to pursue them," said Chief Financial Officer Chuck Atwood, referring to the high cost of development and expansion.