MGM Resorts International
's (
MGM
) second quarter 2012 adjusted loss of 12 cents per share improved
from the Zacks Consensus Estimate of a loss of 14 cents per share.
However, loss per share was wider than the prior-year quarter's
loss of 5 cents per share.
However, on a GAAP basis, MGM Resorts posted net loss of 30 cents
per share compared with net earnings of $6.22 per share in the
prior-year quarter.
Total revenue jumped 28.2% year over year to $2.32 billion but fell
short of the Zacks Consensus Estimate of $2.35 billion. MGM China
generated net revenues of $709.0 million, up 6.0% year over year.
Year-over-year increases in the main floor table games and slots
were recorded in MGM China.
CityCenter performed better in the second quarter, with net revenue
from resort operations growing 3.0% year over year to $282.0
million.
Inside the Headline Numbers
Casino revenue related to wholly-owned domestic resorts dipped 1%
year over year because of a lower table games hold percentage. The
overall table games hold, as a percentage of turnover, was 17.7%,
lower than the year-ago level of 18.2%. Revenues from slots were
flat in the quarter.
Room revenue grew 3.0% primarily attributable to a 5.0% increment
in RevPAR (revenue per available room) in the Las Vegas Strip.
Operating income for the wholly-owned domestic resorts in the
second quarter of 2012 was $214.0 million, up 10% year over year.
MGM Resorts reported a total operating income of $175.4 million
compared with $3.68 billion in the year-ago quarter.
Liquidity
At quarter end, MGM Resorts' total cash balance was $1.73 billion.
Long-term debt outstanding was $13.2 billion.
Our Take
We believe that MGM Resorts is ideally positioned to take advantage
of both domestic and international opportunities, and is executing
well on its business strategy. With no new supply in the Las Vegas
market, moderate pickup in visitation will augur well for the
company in the domestic arena. The company's convention bookings
for 2013 appear strong. MGM also remains hopeful about its progress
in China.
However, a huge portion of debt in its balance sheet remains a
cause of concern. Furthermore, slowdown in consumer discretionary
spending in the U.S. will likely lead to a muted RevPAR growth in
the upcoming quarter.
The company which competes with
Las Vegas Sands Corp.
(
LVS
) currently holds a Zacks #3 Rank (short-term Hold rating). Our
long-term recommendation remains Neutral.
LAS VEGAS SANDS (LVS): Free Stock Analysis
Report
MGM RESORTS INT (MGM): Free Stock Analysis
Report
To read this article on Zacks.com click here.
Zacks Investment
Research