MGM Resorts Posts Profit In Q3, To Create Controlled REIT

(RTTNews) - Casino operator MGM Resorts International (MGM) reported a turnaround to profit in the third quarter, reflecting a tax benefit and higher income from unconsolidated affiliates. This helped offset lower revenues that also missed analysts' estimates.

MGM Resorts said it will create a controlled real estate investment trust to be named MGM Growth Properties LLC. MGM Resorts will contribute the real estate associated with ten of its premier properties and MGM Growth Properties will assume about $4 billion of debt. MGM Resorts expects to complete the transaction in the first quarter of 2016.

MGM Resorts also announced that it confidentially submitted a draft registration statement on Form S-11 to the SEC relating to MGP's proposed initial public offering of Class A common shares of MGM Growth Properties.

Las Vegas, Nevada-based MGM Resorts reported net income for the third quarter of $66.43 million or $0.12 per share, compared to net loss of $20.27 million or $0.04 per share in the prior-year quarter.

On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of $0.04 per share for the quarter. Analysts' estimates typically exclude one-time items.

Net revenue for the quarter declined to $2.28 billion from $2.49 billion in the same quarter last year, and missed analysts' consensus estimate of $2.30 billion.

Net revenue at the company's wholly owned domestic resorts rose 4 percent to $1.6 billion, with rooms revenue increasing 8 percent and a 2 percent increase in slots volume.

MGM China revenues declined 33 percent from last year to $529 million, with VIP table games revenue decreasing 39 percent, and main floor table games revenue down 33 percent.