DraftKings Posts Wider-Than-Expected Quarterly Loss. The Stock

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DraftKings
,
the online sports betting company, fell Friday after reporting a third-quarter loss wider than analysts’ expectations and revenue that missed forecasts.

DraftKings

(ticker: DKNG) posted a quarterly loss of $1.35 a share on revenue of $213 million.

The stock closed down 2.5% at $43.56.

Both sports betting companies’ confidence in the return of regular sports seasons wasn’t enough to receive a strong rating from several analysts on Friday. Rival Penn National Gaming (PENN) reported Thursday that third-quarter earnings fell almost 40% from a year earlier.

Analysts expected DraftKings to report a third-quarter loss of 98 cents a share on revenue of $236.9 million. Revenue a year earlier was $133 million.

The company said third-quarter revenue would have been $40 million higher if more NFL games went the company’s way.

“Lower-than-expected sports betting hold primarily due to NFL game outcomes impacted revenue and EBITDA in the quarter,” said CEO Jason Robins on a call with investors Friday morning. “Strong customer acquisition performance in new state launches, particularly Arizona, drove additional promotional investment, which also impacted third quarter revenue.”

Operating expenses in the quarter rose to $759 million from $481 million. Sales and marketing costs rose to $304 million from $203 million.

The company said average revenue per monthly unique player was $47 in the third quarter, a 38% increase from the same period in 2020.

The company boosted the midpoint of its revenue guidance for fiscal 2021.

DraftKings said it expects fiscal-year revenue of $1.24 billion to $1.28 billion, vs. previous guidance of $1.21 billion to $1.29 billion. Analysts have been calling for fiscal-year revenue of $1.29 billion.

For fiscal 2022, DraftKings said it expects revenue of $1.7 billion to $1.9 billion.

Macquarie Research gave the company an Outperform rating, citing the boosting of DraftKings revenue midpoint for fiscal 2021 as one of the reasons. Macquarie also cited the fact that more states are introducing legislature that allows sports betting.

“Following successful launches in Wyoming, Arizona and Connecticut, DraftKings is now live with OSB (online sports betting) in 15 states that collectively represent 29% of the U.S. population,” Macquarie analyst Chad Beynon wrote in a note Friday morning.

Last month, DraftKings dropped its plan to acquire…