Reports net income of $21.4 million, down from $147.5 million a year ago

Penn National Gaming reported net income of $21.4 million during the third quarter, or 20 cents per share, compared to $147.5 million, or $1.69 per share, during the same period in 2008.

“The challenging economic environment, which has resulted in lower consumer spending at gaming facilities, continued to impact operating results for both the overall industry and Penn National in the third quarter, particularly during the month of August,” said Peter Carlino, chairman and chief executive officer.

Net revenue increased slightly from $617.9 million in 3Q08 to $620.4 million in 2009. Gaming revenue increased to $565.5 million from $558.4 million.

Carlino noted the company’s interest in purchasing the bankrupt, unfinished Fontainebleau Las Vegas. He said during a conference call that the company is in talks with a partner “who could bring something besides money to the table.”

Fontainebleau said last week that it continues to work with Penn on a deal in which Penn would be the stalking horse bidder with an undisclosed bid that would be substantially less than the previously reported $300 million.

Carlino would not discuss a price or budget for the project.

“Our view is that despite impressive scale, its value is little to nothing because the cost to complete is at the edge of value in our judgment,” he said. “Around that, we have a very disciplined sense of what we will accept and what we will not. It goes our way or it doesn’t go. We chase nothing, we’ll stretch for nothing.”

Penn operates 19 casinos and racetracks in Colorado, Florida, Illinois, Indiana, Iowa, Louisiana, Maine, Mississippi, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, West Virginia and Canada.