MGM Q3 loss narrows, Macau revenue ahead of forecasts

MGM Resorts reported an unexpected Q3 loss and revenue was below forecasts as U.S. operations underperformed, however the group’s Macau properties fared slightly better than estimates.

The casino operator reported a Q3 net loss, adjusted for non-recurring costs, of $0.02 per share, compared to an adjusted net loss of $0.08 per share in the year-ago period. Analysts were expecting profit of $0.06 per share.

On a GAAP basis, MGM said its Q3 net loss decreased to $20.2 million, or $0.04 per share, from $22.3 million, or $0.05 per share.

Revenues rose 0.9% year-on-year to $2.48 billion, slightly below the Street estimate of $2.49 billion.

“In Las Vegas, the market continues to improve as our top line revenues grew 3%,” Chairman and CEO Jim Murren said. “While we expected to have some negative impact to margins during the quarter as a result of the disruptions related to our investments in Delano at Mandalay Bay and the Strip frontage at Monte Carlo, we were also negatively affected by lower year over year table games hold and an increase in certain expenses.”

Macau net revenues came in at $794 million, down about 2 percent, and above the $770 million forecast by UBS and and Street’s $765 million.

Q3 VIP volumes fell 19 percent, while mass revenue jumped 34 percent, above UBS’ expectations.

MGM China EBITDA was $213.8 million versus Sterne Agee’s $197.6 million estimate and consensus of $191.6 million.

“Strength in margins demonstrate the continued shift to higher margin, more visible mass versus VIP, as well as still rational marketing to premium mass players, in our view,” Sterne Agee wrote in a note.

The company said the construction of MGM Cotai is progressing well and is on time, and on budget, for a fall 2016 opening.

 

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