Melco Crown Entertainment LimitedMPEL posted robust fourth-quarter 2016 results, with earnings and revenues beating the Zacks Consensus Estimate.
However, the company's shares declined more than 4% in yesterday's trading session, mirroring investor concerns over lower casino revenues at some of its properties.
Earnings and Revenue Discussion
Adjusted earnings per share of 13 cents outpaced the Zacks Consensus Estimate of 10 cents by 30%. Earnings also increased 44.4% over the prior-year quarter.
Meanwhile, quarterly net revenue of $1.19 billion surpassed the Zacks Consensus Estimate of $1.15 billion by nearly 4% and also increased 12.7% on a year-over-year basis.
The year-over-year improvement in the top line was primarily driven by contributions from Studio City, launched in Oct 2015, as well as higher casino revenues at City of Dreams Manila. These upsides were, however, partially offset by lower casino revenues at City of Dreams Macau and Altira Macau.
Adjusted Property EBITDA (earnings before interest, taxes, and amortization) was $304.3 million in the quarter under review, up 28.7% year over year. The upside was prompted by increased contribution from the fully operating Studio City, higher casino revenues at City of Dreams Manila, but somewhat offset by lower contribution from Altira Macau.
City of Dreams Macau
Net revenue at City of Dreams was $661.1 million, down 1.2% year over year. Adjusted EBITDA was $188.7 million in the fourth quarter, reflecting a decrease of 1.8% year over year primarily due to lower mass market table games revenues and rolling chip revenues, partially offset by an increase in non-gaming revenues.
Rolling chip volumes totaled $11.1 billion, up 8.8% year over year. The rolling chip win rate was 2.6% compared with 2.8% in the year-ago quarter.
Net revenue at Altira Macau was $103.3 million, down by a significant 27.3% year over year. Altira Macau generated adjusted EBITDA of $3.3 million in the fourth quarter, down considerably by 66% on a year-over-year basis.
Rolling chip volume was $4.4 billion, down 8.3% from the prior-year quarter. The rolling chip win rate was 2.7% compared with 3.3% in the year-ago quarter.
Net revenue from Mocha Clubs was $28.9 million, down 9.7% year over year. Adjusted EBITDA of $5.4 million was also down 15.6% year over year.
Studio City started operations on Oct 27, 2015. For the fourth quarter, net revenue at Studio City was $246.2 million, up almost 100% year over year. Adjusted EBITDA of $56.7 million, was up significantly on a year-over-year basis primarily on the back of a fully-operating Studio City in the quarter.
Mass-market table games drop was $683.2 million, up 87% year over year. Meanwhile, the mass-market table games hold percentage was 26.9% in the quarter compared with 22.4% in the year-ago quarter. Total non-gaming revenue at Studio City in the quarter was $53.3 million, up 41% year over year.
City of Dreams Manila
For the fourth quarter, net revenue at City of Dreams Manila was $144.7 million, up 78.9% year over year. Adjusted EBITDA was $50.2 million, up substantially from the year-ago quarter, thanks to increased casino revenues.
Rolling chip volume totaled $2.1 billion, up 61.5% from the year-ago quarter figure. The rolling chip win rate was 3.5% compared with the year-ago level of 2.1%.
Melco Crown Entertainment Limited Price, Consensus and EPS Surprise
Melco Crown's full-year adjusted earnings of 38 cents surpassed the Zacks Consensus Estimate of 34 cents by 11.8%. However, it declined roughly 13.6% year over year.
Full-year net revenue of $4.52 billion came above the Zacks Consensus Estimate of $4.46 billion by 1.4% and declined 13.7% year over year.
Zacks Rank & Other Stocks to Consider
Melco Crown presently has a Zacks Rank #2 (Buy). Other favorably ranked stocks in the sector include Intrawest Resorts Holdings, Inc. SNOW , Royal Caribbean Cruises Ltd. RCL and Belmond Ltd. BEL . While Intrawest Resorts Holdings sports a Zacks Rank #1 (Strong Buy), Royal Caribbean and Belmond carry the same Zacks Rank as Melco Crown. You can see the complete list of today's Zacks #1 Rank stocks here .
The Zacks Consensus Estimate for Intrawest Resorts Holdings' fiscal 2017 earnings climbed nearly 26% in the past 60 days. Moreover, the trailing four-quarter average earnings surprise is a positive 8.71%.
Royal Caribbean's earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 22.26%. Further, for 2017, EPS is expected to grow a robust 15.46%.
Belmond posted positive earnings surprise in three of the last four quarters, with an average beat of 108.63%. Additionally, for 2016, EPS is expected to improve 66.7%.
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