MGM Resorts Q3 Loss Narrows

(RTTNews) - Casino operator MGM Resorts International (MGM) on Thursday reported a loss for the third quarter that narrowed from last year on higher revenues at MGM China as well as the company's Las Vegas strip properties. Revenue for the quarter beat analysts' estimates.

Jim Murren, MGM Resorts International Chairman and CEO said, "I am pleased to report another solid quarter with double digit EBITDA growth and increased margins, led by strength at MGM China and our Las Vegas Strip properties. These results are reflective of the continued market share gains from programs such as M life and our focus on international marketing strategies combined with our best in class collection of resorts and amenities."

Las Vegas, Nevada-based MGM Resorts reported net loss for the third quarter of $31.86 million or $0.07 per share, narrower than loss of $181.16 million or $0.37 per share in the prior-year quarter.

The latest quarter's results were affected by non-cash impairment charges of $26 million or $0.03 per share, primarily related to land holdings in Jean and Sloan, Nevada. The quarter's income tax provision was affected by $28 million or $0.06 per share of valuation allowance on U.S. deferred tax assets, including a valuation allowance related to tax benefit.

The prior-year quarter's results were affected by the company's share of CityCenter's non-cash residential impairment charge related to Mandarin Oriental, estimated costs accrued for the demolition of the Harmon, and by a valuation allowance for a portion of U.S. deferred tax assets. These items totaled $0.14 per share.

On average, 25 analysts polled by Thomson Reuters expected the company to report loss of $0.03 per share for the quarter. Analysts' estimates typically exclude one-time items.

Net revenue for the quarter grew 9 percent to $2.46 billion from $2.25 billion in the same quarter last year, and topped analysts' consensus estimate of $2.42 billion.

The company's consolidated casino revenue for the quarter rose 13 percent from the year-ago period to $1.46 billion. Rooms revenue grew 5 percent to $413.06 million.

Consolidated operating income increased 80 percent to $247.76 million from $137.40 million in the prior-year quarter.

Casino revenue related to the company's wholly-owned domestic resorts increased 3 percent compared to the prior year quarter. Table games revenue increased 10 percent.

The overall table games hold percentage in the quarter was 21.5 percent, compared to 20.4 percent for the prior-year quarter. Slots revenue increased 1 percent, with a 3 percent increase at the company's Las Vegas Strip resorts.

Occupancy at the wholly-owned domestic resorts was 93 percent compared to 92 percent in the year-ago period. Average Daily Rate or ADR rose 2 percent to $127 from $124 and revenue per available room or REVPAR increased 3 percent to $117.

MGM China revenues for the quarter grew 22 percent from last year to $808 million, due primarily to increases in VIP revenues and main floor table games revenues.

Dan D'Arrigo, MGM Resorts International Executive Vice President, CFO and Treasurer, said, "We continue to execute on our goals of improving the Company's free cash flow. This is evidenced by our year to date EBITDA growth of 17% as well as an expected reduction in our cash interest expense this year of approximately $220 million."

D'Arrigo added that the company continued to be opportunistic in accessing the capital markets as indicated by its recent CityCenter refinancing, which will lower its annual cash interest expense by about $80 million.

MGM China is currently developing a second resort and casino, MGM Cotai, on an approximately 17.8 acre site in Cotai, Macau. In May 2013, MGM China signed a deal with China State Construction to serve as sole general contractor for the project. The total project budget, excluding capitalized interest and land, is $2.6 billion.

MGM closed Wednesday's regular trading session at $20.29. In Thursday's pre-market, the stock is down $0.69 or 3.40 percent to $19.60.