SAM Magazine-Broomfield, Colo., Mar. 6, 2012-Vail Resorts (VR) saw its fiscal second-quarter net income drop 15 percent as the mild, low-snow winter kept customers away, especially at its Tahoe resorts. Increased ticket prices and room rates mitigated the drop in visits, or the decline would have been greater.

This winter's weather has been especially challenging for VR, as its resorts in both Colorado and Tahoe have been among the hardest hit by this season's snow drought. Its Tahoe resorts had almost no natural snowfall during the November-January fiscal quarter, while its Colorado resorts only got significant snow starting in mid-January.

Despite all that, VR earned $46.4 million for the November-January quarter, down from $54.6 million during the same period the year before. Revenue for the three months fell just 5.5 percent, to $373.3 million, from $395.1 million.

Perhaps most encouraging, mountain division revenue fell just 1 percent, to $315.9 million, despite the 15 percent decline in visits. Ticket prices rose about 9 percent, and season pass sales were up 12 percent, keeping revenues from falling very far. In addition, customers spent more on other items while visiting VR's resorts.

A similar story played out in the lodging division. With fewer guests at the resorts, revenues fell 6.5 percent to $48.3 million, even though the average daily room rate soared nearly 14 percent.

The results for the first half of the ski season have led VR to lower its earnings forecast for the year. It now projects earnings to be in a range of $205 million to $215 million, excluding one-time costs and gains, interest expense, taxes and other items from resorts, down from a previous outlook of $233 million to $243 million. VR projects net income of between $13 million and $23 million, down from earlier expectations of $30 million to $40 million.

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