Vail Resorts reports solid earnings
AVON – While earnings didn’t match last year’s record, Vail Resorts’ 2005 third-quarter results were solid, with $58.8 million profit on $327.5 million in revenue.A 6 percent dip in earnings for the quarter – the busiest of the year – was a result of increased visitors to the company’s five ski resorts and other expenses, a company press release stated. Revenue increased 14 percent from last year’s third-quarter revenue of $288 million.Good snow, a better business travel climate and a better tourism climate in general helped boost the company’s fortunes.The quarterly results caused the company to increase its year-end earnings estimate from a range of $152 million to $162 million. The company is expecting a year-end net profit of $22 million to $29 million. The company’s fiscal year ends July 31.Part of the increased operating expenses for the quarter came from a 33 percent increase in trail grooming the company did on Vail and Beaver Creek mountains.”The numbers speak with clarity for themselves,” Vail Resorts chief executive Adam Aron said.Lots of skiers, lodgersFour of the company’s five ski resorts hosted more than a million skiers and snowboarders this past season.Beaver Creek had its third consecutive record year with 815,000 skier visits – a 6 percent increase. Heavenly at Lake Tahoe also had a record year with 1.04 million skiers – a 9.6 percent increase.The increase in business was boosted by free-spending “destination guests” and international travelers who spend a week or more at the company’s resorts.”There was an increase in destination visitors who tend to pay higher prices for lift tickets and purchase more,” Aron said. Year to date, the company’s revenue picture is ahead of last year. It is reporting total revenue of $690 million – 7.9 percent ahead of last year at the same time. Mountain revenue was $505.5 million – 8.2 percent better than last year.Lodging revenue from the company’s 10 RockResorts and slopeside hotels was up 8.4 percent to $145.1 million, and real estate revenue at the nine-month point was up $700,000 to $39.3 million.The company’s net income at the nine-month juncture was $59.6 million or $1.65 per share of stock compared to $30.3 million and 86 cents a share for the same period last year.What now?Looking ahead, Aron said Vail’s $1 billion renovation of Vail Village and Lionshead, and the $500 million the company is spending on construction of homes and lodging in town, make the future bright.”Based on current construction cost estimates, we estimate that taken together, the Arrabelle and Gore Creek Place projects will generate about $80 million to $92 million in income,” he said. The Arrabelle has 67 residential units and Gore Creek Place, 16.Last month Vail Resorts sold the Marriott Mountain Resort for $62 million four years after acquiring it for $49 million. That sale will close later this summer, and the profits will be recorded in the fourth quarter, Aron said.”We’re marching right along to our plan,” he said. Early season pass sales for the 2005-2006 season have been brisk, Aron said, despite a 10 percent increase in the price of passes.Investors seemed to take notice of the company’s performance. The company’s stock closed Thursday at $28.15, up 3.3 percent.Cliff Thompson can be reached at (970) 949-0555, ext. 450, or firstname.lastname@example.org.
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