Las Vegas, Nev.-based casino operator
MGM Resorts International
) posted solid fourth-quarter results with higher earnings and
revenues. The company's fourth-quarter 2013 adjusted earnings of
11 cents per share comprehensively beat the Zacks Consensus
Estimate of a loss of a penny as well as the prior-year quarter
loss of 23 cents per share.
The better-than-expected bottom-line performance can be
attributed to higher top line and increased adjusted earnings
before interests, taxes, depreciation and amortization
On a reported basis, MGM Resorts posted a loss of 8 cents per
share compared with a net loss of $2.50 per share in the
In the fourth quarter, total revenue increased 10% year over
year to $2.51 billon, which surpassed the Zacks Consensus
Estimate of $2.45 billion by 2.4%. Quarterly revenues benefited
from decent performance in China and improving Las Vegas
The company's owns and operates several properties, spread
across Las Vegas, Nevada. Apart from this the company also boasts
several assets in Mississippi and Michigan.
Casino revenues from wholly owned domestic resorts declined 2%
due to 170 basis points (bps) fall in the overall table games
hold percentage. Slot revenues were up 3% mainly driven by
continued impressive performances at the Las Vegas Strip
Room revenues increased 3.0%, primarily attributable to a 1.0%
rise in revenue per available room (RevPAR) at the Las Vegas
Strip properties. A higher average daily rate led to the
Adjusted EBITDA of the company's wholly owned domestic resorts
was $356 million, up 6% year over year.
MGM's urban complex CityCenter operates through two segments -
resort and residential. Under the resort operations, the company
boasts four properties - Aria, Crystals, Vdara and Mandarin
Oriental. Although CItyCenter's resort operations posted solid
results during the quarter, its residential business was
Net revenue from CityCenter dropped 21% year over year to
$313.8 million due to dismal performance in the residential
division. Net revenue from resort operations grew 11% year over
year to $301.0 million with the rise in sales across two
properties - Aria and Crystal. Aria's table games hold percentage
was 26% in the quarter versus 23.9% in the prior-year quarter.
Crystals, Vdara and Mandarin Oriental also put up a decent show.
Residential sales in the quarter were $0.12 million lower than
the year-ago quarter's level of $122.7 million.
City Center's adjusted EBITDA improved 36% year over year to
$93 million primarily benefiting from higher table games hold
MGM China's net revenue was up 27% year over year to $926.0
million due to increases in main floor table games and VIP
revenues. Main floor table games and slot revenues went up 18%
and 4% year over year, respectively. VIP table games turnover
increased a significant 32%.
Adjusted EBITDA grew 35% to $238.0 million due to higher
contribution from the main floor business.
Full-Year 2013 Highlights
In full-year 2013, adjusted earnings per share were 24 cents
which compared favorably with the Zacks Consensus Estimate of
earnings of 10 cents per share and year-ago quarter's loss of 69
cents per share. Revenues were $9.81 billion, up 7% year over
year and also above the Zacks Consensus Estimate of $9.60 million
Recently, the company's subsidiary, MGM China, declared a
special dividend worth $500 million to be paid to shareholders of
record as of Mar 10, 2014.
MGM Resorts expects its Las Vegas business to grow further in
2014 gaining from solid convention booking and other
sales-building initiatives. The company also expects its Macau
business to perform well in 2014. MGM Resorts plans to increase
its coverage by twofold in Macao - the only Chinese city where
gambling is legal - with the launch of MGM Cotai in 2016 in Cotai
We believe strong revenue generation in the China market will
help it to further boost its business. Limited supply, a moderate
increase in visits in the Las Vegas market and improving trends
at its urban complex CityCenter should bode well in the domestic
Other Stocks to Consider
MGMM Resorts sports a Zacks Rank #2 (Buy). Some other casino
operators that are worth considering at the current level include
Bally Technologies, Inc.
Melco Crown Entertainment Limited
Las Vegas Sands Corp.
). While Bally Technologies sports a Zacks Rank #1 (Strong Buy),
Melco Crown and Las Vegas Sands carry the same Zacks Rank as MGM
BALLY TECH INC (BYI): Free Stock Analysis
LAS VEGAS SANDS (LVS): Free Stock Analysis
MGM RESORTS INT (MGM): Free Stock Analysis
MELCO CROWN ENT (MPEL): Free Stock Analysis
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