MGM Resorts International, the largest casino operator on the Las Vegas Strip, reported first-quarter profit that beat analysts’ estimates, helped by gains in the fast-growing enclave of Macau. The stock jumped.
MGM Resorts, based in Las Vegas, posted profit of 22 cents a share excluding items, beating the 9-cent average of 20 analysts’ estimates compiled by Bloomberg. Sales increased 12 percent to $2.6 billion, according to a statement today.
Explosive development in the former Portuguese colony of Macau, the only place in China where betting is legal, has opened a rich new market for U.S. casino owners while gambling recovers at home. Industry revenue in Macau rose almost 20 percent in the first three months of 2014, according to the Gaming Inspection and Coordination Bureau Macau.
The shares advanced 8.5 percent to $24.98 at the close in New York, the most since December 2012. They have gained 6.2 percent this year.
MGM Resorts and rival Sands China Ltd. have seen continued strong growth in betting in the Chinese territory of Macau. Revenue at the MGM China unit rose 26 percent to $941 million in the quarter.
Back in MGM Resorts’ domestic market, total revenue from properties such as Bellagio, Mandalay Bay and Excalibur increased 5.4 percent to $1.57 billion. Casino revenue dipped 2 percent amid decreases in table games and slots.
Net income rose to $108.1 million, or 21 cents a share, from $6.5 million, or 1 cent, a year earlier, according to the statement. In the year-ago quarter, the company had a $30.4 million provision for income taxes compared with a benefit of $3.5 million this year.