MGM Resorts Q1 Profit Surges, Results Beat View

(RTTNews) - Casino operator MGM Resorts International (MGM) on Tuesday reported a profit for the first quarter that surged from last year, reflecting strong revenue growth at its Macau operations and higher traffic at its Las Vegas properties. Both revenue and earnings per share for the quarter beat analysts' estimates.

Jim Murren, MGM Resorts International Chairman and CEO said, "We are off to a strong start in 2014, with double digit Adjusted EBITDA growth at our wholly owned domestic resorts and record results at MGM China and CityCenter."

Murren added, "In the U.S., we are executing on our strategy to drive customer loyalty by increasing incremental convention business to our properties mid-week, hosting the best events on the weekends, and continually bringing new and exciting capital initiatives to our properties."

Las Vegas, Nevada-based MGM Resorts reported net income attributable to the company for the first quarter of $108.16 million or $0.21 per share, up from $6.55 million or $0.01 per share in the prior-year quarter.

On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $0.09 per share for the quarter. Analysts' estimates typically exclude one-time items.

Net revenue for the quarter grew 12 percent to $2.63 billion from $2.35 billion in the same quarter last year, and topped analysts' consensus estimate of $2.58 billion.

Consolidated operating income increased 37 percent to $412.63 million from $301.82 million in the prior-year quarter.

The company's consolidated casino revenue for the quarter rose 13 percent from the year-ago period to $1.58 billion. Rooms revenue grew 13 percent to $452.39 million.

However, casino revenue related to the company's wholly-owned domestic resorts declined 2 percent compared to the prior year quarter, reflecting a decrease in table games hold percentage and a small decrease in slots revenue.

The overall table games hold percentage in the quarter was 20.8 percent, compared to 21.9 percent for the prior-year quarter. Slots revenue increased 1 percent at the company's Las Vegas Strip resorts, but decreased 5 percent at the company's other wholly-owned domestic resorts.

Occupancy at the wholly-owned domestic resorts was 92 percent, compared to 90 percent in the year-ago period. Average Daily Rate or ADR rose 11 percent from the prior-year quarter to $147 and revenue per available room or REVPAR increased 14 percent to $135.

Meanwhile, MGM China revenues for the quarter grew 26 percent from last year to $941 million, due primarily to increases in VIP revenues and main floor table games revenues. MGM China Holdings owns the MGM Macau resort and casino and is in the process of developing a gaming resort in Cotai.

MGM Resorts said that MGM Cotai, its second Macau property, is on schedule to open in early 2016. The company is also preparing to break ground on MGM National Harbor in Maryland this summer, which is expected to open in 2016.

MGM is currently trading at $24.28, up $1.26 or 5.47 percent on a volume of 1.38 million shares.