MGM Resorts International
) fourth quarter 2012 adjusted loss of 23 cents per share is in
line with the Zacks Consensus Estimate. However, loss per share
was wider than the prior-year quarter's loss of 21 cents per
However, on a reported basis, MGM Resorts posted a net loss of
$2.50 per share compared with a net loss of 23 cents per share in
the prior-year quarter. In full year of 2012, earnings per share
were $3.62 versus a loss of $5.62 per share recorded in 2011.
In fourth quarter, total revenues remained nearly flat year
over year to $2.3 billon and in line with the Zacks Consensus
Estimate. Total revenue reflected growth in the revenues of MGM
Inside the Headline Numbers
MGM China's net revenues were up 2.0% annually to $731.0
million, on the back of a 13% and 37% rise in volume of table
games as well as slots, respectively.
Net revenues related to wholly-owned domestic resorts fell
0.7% to nearly $1.5 billion. Similar to the prior quarter,
CityCenter continued to perform better in the fourth quarter as
well with net revenues from resort operations growing 2.6% year
over year to $272.0 million.
Consolidated casino revenues grew 1%, driven by a 1% rise at
the company's wholly-owned domestic resorts. The overall table
games percentage at casinos of wholly-owned domestic resorts was
21.9%, higher than the year-ago level of 22.8%. Revenues from
slots inched up 2% in the quarter.
Room revenues increased 2.0%, primarily attributable to a 1.0%
rise in RevPAR (revenue per available room) in the Las Vegas
Strip properties. A slightly higher average daily rate led to the
rise in RevPAR at these resorts.
Wholly-owned domestic resorts' operating income in the quarter
was $202.0 million, up 8% year over year. MGM Resorts reported
total operating loss of $424.9 million compared with an operating
income of $91.1 million in the year-ago quarter.
At quarter end, MGM Resorts' total cash balance was $1.5
billion. Long-term debt outstanding was $13.6 billion.
Recently the company's subsidiary MGM China declared a special
dividend worth $500 million that is scheduled to be paid to
shareholders of record as of March 11, 2013.
Given its strong brand name, we believe that MGM Resorts is
better positioned to command a premium rate relative to the
overall gaming and lodging industry. The company's properties are
well-diversified within the U.S. as well as outside the U.S.
MGM's strong revenue generation at MGM China and an improving
trend at CityCenter are impressive. The company's convention
bookings for 2013 and 2014 appear strong.
Although MGM Resorts drives a solid share of its total revenue
from Macau, the company has begun experiencing a slowdown in that
region, owing to a weakening Chinese economy.
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MGM Resorts currently retains a Zacks Rank #2 (Buy). Moving
ahead, other companies in the industry, which are expected to
perform well, include
Melco Crown Entertainment Limited
Boyd Gaming Corp.
Bally Technologies, Inc.
). All these stocks carry a Zacks Rank #2 (Buy).