MGM Resorts International (MGM) swung to a second-quarter profit
as a multibillion-dollar benefit from the initial public offering
of its Chinese joint venture added to strong revenue growth in Las
Vegas and Macau.
Shares still fell 4.7%, to $11 after-hours Friday. The stock was
up 7.8% over the past year through the close.
MGM's results have improved over the past year as a slow rebound
in U.S. spending drives higher traffic to its Las Vegas hotels and
casinos. Its struggling CityCenter resort is also hemorrhaging less
money. Last year's results included a $1.12 billion write-down from
the $8.5 billion complex, which is jointly owned with Dubai
World.
The latest quarter benefited from a $3.5 billion gain on the IPO
of MGM China Holdings Ltd., its joint venture with Macau gambling
maven Pansy Ho. No U.S. operator wants to be left out of the
booming business in Macau, the only place in China where casino
gambling is legal.
New Jersey gambling regulators, meanwhile, granted the company
another year-and-a-half to sell its 50% stake in Atlantic City's
Borgata Hotel Casino & Spa as part of a settlement to leave the
local market, the Press of Atlantic City reported Monday. State
regulators had earlier found MGM's business with Pansy Ho
"unsuitable" because of her father's reputed connection to Asian
organized crime, a charge he denies.
MGM reported a profit of $3.44 billion, or $6.22 a share,
compared with a prior-year loss of $883.5 million, or $2 a share.
The latest quarter included a net $6.27 a share gain, mostly on the
MGM China IPO, while prior-year results included $1.65 of net
charges. Net revenue rose 17%, to $1.81 billion.
Analysts polled by Thomson Reuters expected 13-cent per-share
loss and revenue of $1.59 billion.
Total casino revenue jumped 33% as revenue in both Macau and Las
Vegas surged.
Revenue per available room climbed 10% on the Las Vegas strip,
as occupancy rates edged up to 94% from 93% a year earlier.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com