MGM Resorts International, under pressure from an activist investor to boost its stock price, posted second-quarter profit that beat analysts’ estimates as revenue in Las Vegas properties helped offset a slump in Macau businesses.
Earnings per share excluding some items was 19 cents, the Las Vegas-based casino operator said Tuesday in a statement. Analysts predicted 11 cents a share, the average of estimates compiled by Bloomberg. Sales declined 7.6 percent from a year earlier to $2.39 billion, topping estimates.
MGM Resorts, like other operators with casinos in Macau, has seen a slide in business as Chinese high rollers cut back on spending amid economic weakness and a government crackdown on corruption. The company is also under pressure from Land & Buildings Investment Management LLC, which has called on Chairman and Chief Executive Officer James Murren to sell casinos or spin off properties into a real estate investment trust.
The company also cut total expenses by 7.4 percent in the three months through June 30. The shares rose 3.5 percent to $20.53 at 9:55 a.m. in New York, and reached $20.59 earlier, their highest intraday value in more than two months. They had declined 7.2 percent this year through Monday.
Murren, who has said he will study the Land & Buildings proposals, is also contending with the potential sale of a 16 percent stake in the company held by MGM Resorts’ largest shareholder. Kirk Kerkorian, who died in June, left a will that directs his estate to sell the stock in an orderly fashion.
Industrywide, casino revenue in Macau shrank 36 percent in June from a year earlier. Las Vegas Strip revenue shrank 16 percent for the month.