Bloomberg News

MGM Resorts Posts Profit That Tops Estimates on Vegas Gaming

August 05, 2014

MGM Resorts International (MGM:US), the largest owner of casinos on the Las Vegas Strip, reported second-quarter earnings that beat analysts’ estimates, helped by an increase in gambling in the U.S.

Net income totaled $105.5 million, or 21 cents a share, compared with a loss of $93 million, or 19 cents, a year earlier, the Las Vegas-based company said today in a statement. Analysts projected 10 cents, the average of 20 estimates (MGM:US) compiled by Bloomberg.

MGM joins rival Wynn Resorts Ltd. in reporting an increase in gambling in Las Vegas in the second-quarter. Casino revenue at MGM’S domestic resorts rose 6 percent, driven by table games, while room revenue on the Las Vegas strip also advanced 6 percent. At the same time, MGM and other operators are navigating a decline in betting by high rollers in Macau, the only place in China where gambling is legal.

The shares (MGM:US) rose 3 percent to $27.25 at 9 a.m. in New York. Through yesterday, they had increased 12 percent this year.

Sales at MGM China fell 1 percent to $828 million in the quarter. Macau has seen a slowdown recently related to the mainland economy and a crackdown by the Chinese government on corruption and illegal money transfers that’s cooled spending, particularly among high rollers.

MGM China also announced a dividend of $136 million, which will be paid to shareholders of record as of Aug. 25 on Sept. 1, according to the statement.

Total revenue (MGM:US) in the period ended June 30 rose 4 percent to $2.58 billion, beating the $2.57 billion average of estimates.

MGM recorded a $29 million non-cash impairment expense in the quarter, related to its joint venture investment in Grand Victoria.

To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net James Callan, John Lear


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Companies Mentioned

  • MGM
    (MGM Resorts International)
    • $21.11 USD
    • 0.34
    • 1.61%
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