Melco Resorts (MLCO) To Report Q4 Earnings: What's In Store?
Zacks Investment Research | Feb 07, 2018 06:56AM ET
Melco Resorts & Entertainment Limited (NASDAQ:MLCO) is scheduled to report fourth-quarter 2017 results on Feb 8, before the opening bell.
The company has a Zacks Rank #3 (Hold) and an Earnings ESP Filter .
We don’t recommend Sell-rated stocks (Zacks Rank #4 or #5) going into the earnings announcement.
Melco’ssurprise history has been impressive as the company beat estimates in three of the last four quarters with an average positive beat of 61.20%. Notably, the Zacks Consensus Estimate for the to-be-reported quarter’s earnings is pegged at 23 cents, reflecting an increase of 76.9% over the prior-year quarter. Also, revenues are expected to improve 11.1% year over year to $1.33 billion.
A look at the company’s price performance also reveals that it outperformed the industry over the last year. Shares gained a massive 68.9% compared with the industry’s growth of 35.2%.
A Quick Recap of Q3 Performance
Melco’s third-quarter earnings and revenues beat the Zacks Consensus Estimate.
Both earnings and revenues grew significantly year over year. Top-line improvement was primarily driven by higher rolling chip revenues at City of Dreams
What We Are Watching
Per Macau’s Gaming Inspection and Coordination Bureau (“DICJ”), gross gaming revenues (GGR) rose year over year in all the three months of the quarter. This, in turn, indicates that the casino hub is firmly on road to recovery. Notably, Macau’s VIP’s share of overall casino market in the fourth quarter was reportedly 56.2%. We thus expect Melco’s performance in the region to get a boost in the to-be-reported quarter.
Melco Resorts & Entertainment Limited Revenue (TTM)
Increased focus on non-gaming segments like rooms and food and beverages are further expected to drive the quarter’s results. Notably, the company’s large-scale resorts provide distinctive lodging, entertainment and retail options, which appeals to a broader audience from around the region.
Additionally, Melco Resorts’ cost-control efforts including effective management of marketing expenses are likely to drive fourth-quarter profits and margins. The addition of VIP tables at the company’s Studio City property is also aiding it to deliver a broader product offering to a wider breadth of customers. This, in turn, is expected to lead to higher profits in the quarter.
Get The News You Want
The Philippines gaming industry is being supported by the country's robust economic growth and its expanding inbound tourism strategy. City of Dreams, Manila continues to deliver year-on-year growth across all gaming segments in the Philippines, Thus, Melco’s Entertainment City property therein is poised to largely benefit from this growth.
However, stringent capital controls by the Chinese government and increased audits of the junket industry by DICJ in order to stop money laundering might have somewhat restricted gaming revenues in Macau. This may weigh on the company’s quarterly results as well.
Stocks That Warrant a Look
Here are some stocks that you may want to consider as our model shows these have the right combination of elements to deliver a positive earnings surprise:
Penn National Gaming (NASDAQ:PENN) has an Earnings ESP of +3.45% and a Zacks Rank #1 (Strong Buy). The company is slated to report its quarterly numbers on Feb 8. You can see .
Cheesecake Factory (NASDAQ:CAKE) has an Earnings ESP of +0.17% and a Zacks Rank #2. The company is scheduled to report its quarterly numbers on Feb 21.
Fogo de Chao (NASDAQ:FOGO) has an Earnings ESP of +5.63% and a Zacks Rank #3. The company is expected to release its quarterly numbers on Mar 13.
Zacks Top 10 Stocks for 2018
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?
Last year's 2017 Zacks Top 10 Stocks portfolio produced double-digit winners, including FMC Corp (NYSE:FMC). and VMware which racked up stellar gains of +67.9% and +61%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Zacks Investment Research
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.