Like automobile dealers, Wall Street analysts are offering a first look at the line up of gaming companies for 2003, and their reviews, while positive, are tempered with caution.

"We're projecting earnings growth of 11 percent for large cap operators next year and 15 percent for small cap operators - riverboats and Kerzner (International, which has operations in New Jersey, Connecticut, the Bahamas and islands in the Indian Ocean)," said Merrill Lynch analyst David Anders.

The biggest concern is that while analysts expect stronger, but modest growth for the industry, they are projecting much stronger growth for Standard & Poor's top companies.

"(We are projecting) respectable levels of growth, but relative to S&P companies, gaming companies may not be so strong," Anders said.

Growth projections for gaming stocks as a group range as high as 15 percent, but forecasts for blue chip companies as a group are running higher.

"A significant number of real deep cyclicals in the S&P 500 depressed earnings. As they rebound, they have very powerful growth rates so that the respectable performance (of gaming companies) may be well less than S&P companies," Anders said.

Such comparisons may not bode well for the performance of gaming company stocks, and questions about the economy and consumer confidence further cloud projections, analysts agreed.

"Generally for the fourth quarter, the issue we've all been wrestling with is how consumers will act over the next six to 12 months. The fourth quarter will be interesting. It'll be a good indicator for '03," said Goldman Sachs analyst Steve Kent. "We're looking at how low December will go when the Strip and locals usually are in decline. We're looking to see how slow things really are."

Tropicana operator Aztar and Harrah's Entertainment are projected to see revenues actually shrink in the fourth quarter compared with 2001, according to a recent cash flow analysis by Fulcrum Global Partners, an independent Wall Street broker.

"I know seasonally (the fourth quarter) will be slow and we're looking very closely to see how deep it really goes," Kent said.

Mandalay Bay Resorts and Park Place Entertainment are expected to have modest increases in revenue in the same period. Only Boyd Gaming and MGM Mirage are projected to enjoy double-digit revenue growth, according to Fulcrum data.

"If (gaming) companies can show top line growth in the mid- to high-single digits, that'll be a good indicator for a better '03," Kent said.

Cash flow likely will be down slightly for Aztar and flat for Park Place in 2003, according to Fulcrum data. Mandalay Bay is expected to lead the group with cash flow growth of almost 15 percent, trailed by Boyd and MGM at 8 percent and Harrah's at 6 percent.

"Through the third quarter on an earnings per share basis, we've already earned more than in all of 2001," said Boyd spokesman Rob Stillwell.

"Two major growth drivers for our company have been (the acquisition of) Delta Downs (casino in Louisiana) and, going forward, the opening of The Borgata (in Atlantic City)," Stillwell said. "We've also enjoyed same store growth in the third quarter of this year. Downtown has done well and the Boulder Strip continues to improve. And we've made the best of a tough situation with tax increases in Illinois."

MGM spokeswoman Shelley Manscholt said: "Wall Street has identified MGM Mirage as an attractive investment. One commonality among analysts is that our operational performance is superior to our peers and Las Vegas in general is performing far better than other destinations."

Projections are tempered, however, by uncertainty about the economy.

"The softer stock market, lower interest rates and a weaker economy may work against (consumer enthusiasm for gaming vacations and) recovery," Kent said.

"I know seasonally (the fourth quarter) will be slow and we're looking very closely to see how deep it really goes," Kent said.

The sluggish convention and conference business could also dampen the performance of gaming companies in 2003 if it does not recover, analysts said.

"Vegas increasingly depends on convention and conference traffic. That's also business traffic," Kent said.

Wall Street is entering the holidays optimistic but cautious.

"If we see a stronger overall economy, we could get a double barrel recovery. A strong economy is going to generate added convention and conference business and it should also bring consumers back as well," said Kent.

Business travel and convention business, however, are coming back from very weak results in 2002, Kent said.

"I think you'll see consumers muscle the economy through the next couple of quarters and the business traveler come back later in '03. I don't think it'll be early in '03," Kent said.