PENN Entertainment Inc. reported mixed Q4 results, with its stock down 6.7% pre-market and closing 8% lower, amidst significant digital expansion costs. The company experienced a $300 million clean free cash flow burn in the quarter, largely due to the launch of its ESPN Bet sports-wagering product, which resulted in a $333.8 million loss. Overall revenue fell to $1.40 billion, a 12% decrease year-over-year, against an estimated $1.53 billion. Regional revenues saw the Northeast at $662.9M (-0.6% y/y), the South at $285.1M (-6.3% y/y), the West at $133.7M (+2.3% y/y), and the Midwest at $290.6M (+3% y/y). This financial strain has sparked speculation about a potential equity raise in the near future.
Penn Entertainment Stock Is Dropping. The Costs for ESPN BET Might Be Why. https://t.co/47uuUjygr3
This note from Joseph Greff at JP Morgan feels like the first loop of the knot in the noose for $PENN. But I caution folks about reading too much into short-term market share numbers for ESPN Bet. ESPN will get so many more organic touches with potential bettors than any other… https://t.co/LP3Sc2IfXD
Penn’s interactive gambling unit lost $333.8 million in the fourth quarter because of costs associated with the launch of its new ESPN Bet sports-wagering product https://t.co/ep6aDBYRNR
pretty 🤮 inducing nos from $PENN. putting it back on as a funding short (vs an amalgam of casino/iGaming names). interest coverage looking v skinny. they burnt $300mm clean FCF in the qtr.... strong candidate for an equity raise imo in next cpl qtrs. https://t.co/JOcleC2aY9
$PENN (-6.7% pre) PENN Entertainment Inc. Reports Mixed Q4 Results Amid Digital Expansion https://t.co/BqXJ0d3ZOW
ESPNBets, loses. $PENN down 8%. Enormous digitals costs but weak revenue. Huh. Remember when $DIS did a $2b deal to create ESPNBets and get rid of Barstool. That worked out well for Dave. Seriously. *hat tip https://t.co/p4hRBwbHlc
❖ $PENN RESULTS: Q4 ❖ Revenue $1.40B, -12% y/y, EST $1.53B ❖ Northeast revenue $662.9M, -0.6% y/y, EST $650.4M ❖ South revenue $285.1M, -6.3% y/y, EST $282.4M ❖ West revenue $133.7M, +2.3% y/y, EST $128.8M ❖ Midwest revenue $290.6M, +3% y/y, EST $279.9M ❖ Interactive…