DOW JONES NEWSWIRES
MGM Resorts International's (MGM) second-quarter loss widened
sharply as the casino company posted a $1.12 billion write-down on
its $8.5 billion CityCenter resort, though more signs of
stabilizing demand appeared.
Still, excluding charges the loss was wider than analysts had
feared, sending shares down 2.8% in recent premarket action to
$10.95. The stock through Monday's close was up 51% the past
year.
The company, which in June changed its name from MGM Mirage, has
improved its liquidity by refinancing some of its huge debt load.
But it is increasingly dependent on a recovery in Las Vegas after
the opening of CityCenter, jointly owned with Dubai World. The
property's loss narrowed from the first quarter as revenue jumped
39% sequentially.
Chief Executive Jim Murren said the Las Vegas market remains
difficult, but as the company expected, it is seeing a gradual
recovery, and CityCenter is seeing "improved activity."
MGM on Tuesday reported a loss of $883.5 million, or $2 a share,
compared with a prior-year loss of $212.6 million, or 60 cents a
share. Excluding write-downs and other impacts, the loss widened to
35 cents from 12 cents as revenue increased 14% to $1.54 billion
after a prior-year drop of 20%.
Analysts polled by Thomson Reuters recently expected a loss of
24 cents on revenue of $1.46 billion.
Total casino revenue declined 6%, compared with a 12% drop a
year earlier and a 5% decline in the first quarter.
Revenue per available room, a key measure of lodging industry
performance, fell 2% on the Las Vegas strip from a year earlier.
Still, that was an improvement from a 31% drop last year and the
first quarter's 8% decline. Occupancy rates fell to 93% from 94% a
year earlier but improved from 85% in the prior quarter.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com