MGM Resorts International (MGM:US), the largest casino operator on the Las Vegas Strip, reported a wider first- quarter loss after tax costs related to its business in Macau, China.
The net loss expanded to $217.2 million, or 44 cents a share, Las Vegas-based MGM Resorts said today in a statement (MGM:US). Excluding an MGM China dividend tax and other items, the per- share loss was 9 cents. Analysts projected a loss of 16 cents, the average of 22 estimates compiled by Bloomberg.
MGM customers won more money than anticipated in March, Chairman and Chief Executive Officer James Murren said in a telephone interview.
“We expect to be a growing company for the rest of the year,” Murren said, citing improving casino and hotel revenues. First-quarter sales rose, benefiting from growth in China and improving Nevada tourism.
Gambling revenue on the Las Vegas Strip rose 5.4 percent industrywide through eight months of the fiscal year that began July 1, according to the Nevada Gaming Control Board.
MGM Resorts holds 51 percent of MGM China Holdings Ltd., which owns a casino in Macau, the only part of China where gambling is legal. April casino revenue in Macau rose 22 percent to 25 billion patacas ($3.13 billion), the Gaming Inspection and Coordination Bureau said yesterday.
MGM Resorts’ first-quarter sales rose 51 percent to $2.29 billion. Analysts projected $2.25 billion, the average of 16 estimates. The company lost $89.9 million, or 18 cents a share, in last year’s first quarter.
Adjusted earnings before interest, taxes, depreciation and amortization were $430 million in the quarter, $44 million below estimate, according to Joseph Greff, casino analyst at JPMorgan Chase & Co.
The disappointment was due to fewer conventions in Las Vegas in March and greater than expected winnings on the part of MGM customers, Greff said in a research note today.
“We recommend purchase on weakness today as we think the low hold and March-specific softness are, to a large degree, one-time in nature,” he said.
MGM will introduce social games based on its casino brands this quarter, Murren said, and expects to get approval to build a $2.5 billion casino on the Cotai Strip in Macau this year.
The company’s Las Vegas room revenue is expected to increase 8 percent this year as the convention business improves, Steven Wieczynski, a Stifel Nicolaus & Co. analyst in Baltimore, wrote in a note yesterday. He previously had forecast growth of 6 percent and recommends buying the stock.
MGM Resorts fell 4.1 percent to $12.99 at 1:44 p.m. in New York. The stock gained 30 percent this year through yesterday.
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