PENN Entertainment Misses Q4 Earnings Estimates: The Details

PENN Entertainment Inc (PENN) reported its fourth-quarter financial results on February 27, 2025, missing analysts' estimates for both revenue and adjusted earnings per share (EPS). The company's stock price reacted negatively to the news, but let's dive into the details to understand the implications for investors.



PENN Entertainment's Q4 revenue of $1,669.0 million fell short of the $1,680.97 million estimate, while the adjusted EPS loss of $0.88 was worse than the expected loss of $0.38 per share. The company's adjusted EBITDA of $165.2 million also missed the $175.0 million estimate. Despite these misses, PENN Entertainment's stock price was up 1.62% at the time of publication, indicating that investors may be focusing on the company's long-term prospects rather than the short-term misses.



PENN Entertainment's property-level revenue totaled $1.4 billion in the fourth quarter, with an adjusted EBITDAR of $461.2 million and adjusted EBITDAR margins of 33.1%. The company's interactive segment revenue came in at $275 million, with an adjusted EBITDA loss of $109.8 million. PENN Entertainment ended the quarter with $706.6 million in cash and cash equivalents and $1.7 billion in total liquidity.

PENN Entertainment's CEO, Jay Snowden, attributed the company's solid property-level operating results to its initiatives designed to enhance the customer experience and improve operational efficiency. The company's four retail growth projects remain on budget and on track, with the new Hollywood Casino in Joliet expected to open in the fourth quarter of 2025.



In the interactive segment, PENN Entertainment's parlay mix improved sequentially each month since October, with greater than 30% parlay mix as a percentage of handle in December and January. The company's online casino business delivered record quarterly gaming revenue, with over 60% growth year-over-year and continued momentum into 2025. PENN Entertainment plans to repurchase at least $350 million of its common stock in 2025, signaling management's confidence in the company's future prospects.



In conclusion, PENN Entertainment's Q4 earnings miss may have been disappointing, but the company's long-term prospects remain intact. The company's solid property-level performance, strong liquidity position, and aggressive share repurchase program indicate that management is focused on driving shareholder value. Investors should monitor PENN Entertainment's progress in executing its strategic initiatives and capitalizing on growth opportunities in the interactive segment.