Solid earnings report expected from VR
AVON – Vail Resorts today is expected to announce excellent second-quarter earnings.Good snow, solid visitor numbers and an improving national economy may allow the ski company to announce it is coming close to breaking even for the quarter. Last year, the company reported a $6.7 million loss for the second quarter of its fiscal year, which encompasses Nov. 1 to Jan 31.Business across the company’s three divisions – mountain operations, lodging and real estate – has been strong all year. Investors have driven the stock price to better than $24 a share on anticipation of a profitable year by the company. At its initial public offering in 1997, the stock was priced at $22.
Heavy snow in California is allowing the company’s Heavenly resort at Lake Tahoe to extend its season into May. And anecdotal evidence from hotels serving Vail and Beaver Creek indicate business has been solid and is expected to remain so through the remainder of the ski seasonOn top of that, real estate sales in resort towns across the country have been booming. The company also announced earlier in the year that it may sell some of its hotels. Hotels and other lodging outlets are a red-hot commodity, according to experts, and are selling for top dollar because business and other travel has returned that market segment to profitability.
Over the last three years, the company has cut nearly $45 million in operating expenses and has pared staff. At year-end, Vail Resorts reported a $62 million pre-tax profit on operations, but a one-time refinancing of $490 million of debt to take advantage of better interest rates, turned that profit into a $6 million loss for the year. The refinancing is expected to save the company $5 million a year.
Staff Writer Cliff Thompson can be reached at 949-0555, ext. 450, or firstname.lastname@example.org.Vail, Colorado