MGM Resorts Posts Profit That Tops Estimates on VegasChristopher Palmeri
MGM Resorts International, 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 yesterday in a statement. Analysts projected 10 cents, the average of 20 estimates 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 fell 2.2 percent to $25.88 at the close in New York. They have increased 10 percent this year. MGM China Holdings Ltd. fell 0.5 percent to HK$27.55 and is down 17 percent in 2014.
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.
The unit reported adjusted earnings of $210 million, an increase of 3 percent from a year earlier.
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 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.