MGM Resorts International, the biggest casino operator on the Las Vegas Strip, reported a narrower fourth-quarter net loss as performance improved in Macau, while Las Vegas results trailed analysts’ estimates.
The loss of $139.2 million, or 29 cents a share, compared with a loss of $433.9 million, or 98 cents, a year earlier, the company said today in a statement. Excluding items such as tax adjustments, the loss was 20 cents, smaller than the average 22-cent loss estimated by 21 analysts in a Bloomberg survey.
Las Vegas Strip cash flow, excluding MGM’s CityCenter joint venture, fell 4 percent to $217 million. Las Vegas is seeing an uneven recovery from a record two-year slump in gambling and conventions. Industrywide casino revenue on the Strip fell in November and December, while rising 4.1 percent for all of 2010.
“The recovery that has been long awaited and frustrating in its timing is gaining momentum,” MGM Chief Executive Officer Jim Murren said in a telephone interview. This year “we’ve had a consistently strong quarter so far on the convention side, with very good customer spend around events.”
MGM dropped 47 cents, or 3 percent, to $15.07 at 4 p.m. in New York Stock Exchange composite trading. The shares have gained 1.5 percent this year.
Cash Flow Estimates
Fourth-quarter revenue rose 1 percent to $1.47 billion, from $1.45 billion a year earlier, less than analyst projections for $1.5 billion. Cash flow at wholly owned casinos, measured as adjusted earnings before interest, taxes, depreciation and amortization, or Ebitda, fell 5.1 percent to $266.7 million.
Steven Kent of Goldman Sachs Group Inc. and David Katz at Jefferies & Co. were among analysts expecting a rise.
Convention bookings will account for about 14 percent of MGM’s Las Vegas room nights this year, up from 12.7 percent in 2010, Murren said in the interview. Revpar, a measure of room rates and occupancy, will rise at least 10 percent in the first quarter, boosted by resort fees and increased meeting business.
Total operating income from MGM’s Macau joint venture was $119 million, up from $22 million a year earlier, MGM said. The company plans a Hong Kong initial public offering of its joint venture in the world’s biggest casino market, where overall gambling revenue surged 58 percent last year. The MGM Grand Macau repaid MGM $192 million in the quarter.
Cash flow at the $8.5 billion CityCenter joint venture of hotels, condominiums, a casino and mall on the Las Vegas Strip was $36 million in the fourth quarter, on revenue of $257 million.
MGM and partner Dubai World opened CityCenter in December 2009 after the project skirted bankruptcy. The partners replaced most of the property’s $1.8 billion loan with bonds with later maturities last month.
executives earnings discussion earlier today.)