(Bloomberg) -- Caesars Entertainment Inc. shares leaped as much as 10% after Chief Executive Officer Tom Reeg gave an upbeat profit forecast and pointed to continuing signs of recovery for the gambling industry.
Caesars, the largest owner of casinos in the U.S., reported adjusted first-quarter earnings of $505 million before interest, taxes, depreciation and amortization, a 23% increase from a year earlier.
Reeg -- who orchestrated the merger of Caesars and Eldorado Resorts last year, along with the recent purchase of sports betting operator William Hill Plc -- said on a conference call Tuesday that the company would likely earn $1 billion in profit in at least one quarter this year and that he'd be “disappointed” if Caesars doesn't generate over $4 billion for all of 2022.
Consumers cooped up in their homes by the coronavirus socked away savings that they're now beginning to spend on travel and entertainment. Casinos outside of Las Vegas have led industry's recovery because guests don't have to fly to them. Younger patrons with fewer entertainment options have been among the first to return. Older guests may follow.
“As the world reopens, we already see this capital being unlocked and coming into our doors,” Reeg said. “I think the demand for entertainment and just fun, after the last 12 to 14 months, is going to be like nothing any of us have seen in our lifetime.”
The shares jumped as high as $105.50 in New York Wednesday, marking the biggest intraday gain since Feb. 26. They were already up 29% this year through the close Tuesday.
Changes Planned
Reeg also reiterated plans to sell one of the company's big Las Vegas hotels and William Hill's non-U.S. business to help reduce debt. He plans to take the William Hill name off the company's sportsbooks and app, replacing them with Caesars.
Like other Las Vegas resort operators, Caesars has seen an especially steep decline in its meeting and convention business, which has been effectively shut down for the past year. Weekday hotel rates, which depend on that business, remain low. But leisure travel has picked up.
On the call, President Anthony Carano said “weekends in Las Vegas are sold out for the foreseeable future.”
The Caesars website showed rooms available at 10 of the company's Las Vegas resorts this weekend at rates from $179 a night.
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