MGM Resorts' (MGM) Q3 Earnings Meet Estimates, Revenues Beat
Zacks Investment Research | Nov 07, 2017 10:07PM ET
MGM Resorts International (NYSE:MGM) posted adjusted earnings of 33 cents per share, which came in line with the Zacks Consensus Estimate. However, the bottom-line declined 43.1% on a year-over-year basis.
Total revenues of $2.83 billion surpassed the Zacks Consensus Estimate of $2.77 billion by nearly 2% and increased 12.4% year over year. This improvement reflects a significant rise in revenues from the company’s Las Vegas operations, partially offset by weak results at MGM China.
MGM China
MGM China’s net sales fell 6% year over year to $471 million due to lower revenues from main-floor table games and VIP gamblers.
Main-floor table games revenues decreased 11%, given a 3% decline in volume and hold percentage decrease of 170 basis points (bps) year over year to 18.4%.
Moreover, VIP table games revenues witnessed a fall of 3% as turnover declined 6% in the quarter. However, hold percentage increased 30 bps year over year to 3.3%.
MGM China’s adjusted EBITDA (earnings before interest, taxes, and amortization) decreased 21% to $118 million.
Domestic Operations
MGM Resorts owns and operates several properties in Las Vegas. Apart from this, it owns a number of assets in Mississippi and Michigan.
Net revenues of $2.2 billion at the company's domestic resorts increased 18% over the prior-year quarter. Notably, casino revenues from wholly owned domestic resorts surged a significant 32% owing to the acquisition of Borgata Hotel Casino and Spa in August 2016 and opening of MGM National Harbor in December 2016.
Room revenues also climbed 7%. While, Las Vegas Strip RevPAR (Revenue per Available Room) rose 4% in the quarter, average daily rate (ADR) improved 5.8%. However, occupancy dipped 2.1%.
Operating income at the company's wholly owned domestic resorts soared 81.4% to $546 million. Also, adjusted EBITDA increased 25% to $714 million.
Income From Unconsolidated Affiliates – CityCenter Holdings
MGM’s urban complex, CityCenter (located in Las Vegas, with 50% owned by the company), operates through two segments, Resort and Residential. Currently, the company has three properties namely Aria, Vdara and Mandarin Oriental under the Resort operations.
Net revenues from CityCenter rose 5% year over year to nearly $322 million on the back of an increase in casino and rooms revenues.
Adjusted EBITDA was also up 17% to $108 million.
MGM Resorts carries a Zacks Rank #4 (Sell).
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MGM Resorts International Price, Consensus and EPS Surprise
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