MGM Beats on Adjusted Basis - Analyst Blog
04 Maio 2012 - 10:00AM
Zacks
MGM Resorts
International’s (MGM) first quarter 2012 adjusted loss of
9 cents per share bettered from the Zacks Consensus Estimate as
well as prior-year quarter’s loss of 16 cents loss per share.
However, on a GAAP basis, MGM
Resorts posted net loss of 44 cents per share compared with a net
loss of 18 cents per share in the prior-year quarter.
Net revenue jumped 51% year over
year to $2.29 billion. However, excluding MGM China, net revenue
increased 5% year over year. MGM China scored net revenue of
$702 million, up 18% year over year. Year-over-year increases in
VIP table games volume, main floor table games, and slots were
recorded in MGM China.
Inside the Headline
Numbers
Casino revenue related to wholly
owned domestic resorts increased 9% year over year because of a
higher table games hold percentage. The overall table games hold,
as a percentage of turnover, was 18.7%, better than the year-ago
level of 17.7% but on the lower end of the company’s usual expected
range of 19% to 23%. However, revenues from slots increased 7%.
Revenues from rooms grew 6.9% year
over year, primarily attributable to higher RevPAR (revenue per
available room). For wholly owned domestic resorts, room revenue
inched up 3%, with RevPAR at Las Vegas Strip up 4%. However,
CityCenter had a tough first quarter, with net revenue from resort
operations falling 11% year over year to $234 million.
Operating income for the wholly
owned domestic resorts in the first quarter of 2012 was $195
million, up 20% year over year.
MGM Resorts reported a total
operating income of $192.6 million compared with $169.7 million in
the year-earlier quarter.
Financial
Position
At quarter end, MGM Resorts’ total
cash balance was $1.63 billion. Long-term debt outstanding was
$13.4 billion.
Our Take
We believe MGM Resorts is ideally
positioned to take advantage of both domestic and international
opportunities, and is executing well on its business strategy. The
company also remains hopeful of development in China. However, a
huge portion of debt in its balance sheet remains a cause of
concern. Further, while China is contributing strongly to the
company’s growth, domestic business environment is rebounding
slowly.
The company which competes with
Las Vegas Sands Corp. (LVS) holds a Zacks #3 Rank
(short-term Hold rating). Our long-term recommendation remains
Neutral.
LAS VEGAS SANDS (LVS): Free Stock Analysis Report
MGM RESORTS INT (MGM): Free Stock Analysis Report
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