MGM Resorts Falls as Macau Cash Flow Misses Some Estimates
MGM Resorts declined 6.2 percent to $19.04 at the close in New York, the biggest drop since June 20. The shares have advanced 64 percent this year.
“We were a little below on some of the estimates, no excuses,” MGM Chairman and Chief Executive Officer James Murren said in a telephone interview. “Maybe some people got ahead of themselves.”
Investors were looking for MGM Resorts to translate more of its revenue growth into profit, especially at lower-end properties, Cameron McKnight, an analyst with Wells Fargo Securities, said in a research note. Earnings before interest, taxes, depreciation and amortization at MGM China totaled $191 million, missing his estimate by 2 percent, while Ebitda in Las Vegas was $280 million, $9 million below his projection.
MGM Resorts, the largest casino operator on the Las Vegas Strip, has benefited in recent years from dramatic growth in gambling in Macau and a gradual recovery in visitors to its hometown in Nevada. The company issued shares in its Chinese subsidiary in June 2011.
The net loss narrowed to $31.9 million, or 7 cents a share, from a loss of $181.2 million, or 37 cents, a year earlier, Las Vegas-based MGM Resorts said today in a statement. Excluding items, profit was 2 cents a share, compared with the 3-cent loss projected by analysts, the average of 23 estimates.
Sales rose 9.2 percent to $2.46 billion, exceeding the $2.42 billion average of analysts’ estimates compiled by Bloomberg.
Betting in Macau, the only part of China where casino gambling is legal, gained 19 percent to 89.5 billion patacas ($11.2 billion) in the period, according to the region’s Gaming Inspection & Coordination Bureau. Casino revenue on the Las Vegas Strip rose 4.9 percent to $1.66 billion in the quarter, according to the Nevada Gaming Control Board.
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