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Factors Likely to Influence MGM Resorts' (MGM) Q1 Earnings

Zacks Equity Research

MGM Resorts International MGM is scheduled to report first-quarter 2019 results on Apr 29. In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 7.7%. Also, in three out of the last four quarters, the bottom line has outpaced expectations. The four-quarter average beat is 12.7%.

Q1 Expectations

The Zacks Consensus Estimate for first-quarter earnings is pegged at 16 cents, indicating a 52.9% decline from the year-ago quarter number. Over the past 30 days, the company’s earnings estimates have been revised downward by 4 cents. For quarterly revenues, the consensus mark is pinned at nearly $3,130 million, suggesting growth of 10.9% from the prior-year quarter figure.
    
Let’s delve deeper to find out how the company’s top and bottom line will shape up this earnings season.

Factors Likely to Impact Q1 Results

In the quarter to be reported, MGM Resorts’ top line is likely to be driven by robust performance of both China and domestic operations. The Zacks Consensus Estimate for revenues from domestic, resorts is pegged at $2,231 million implying a 6.3% increase from the prior-year quarter figure. Also, the consensus mark for revenues from operations in China stands at $700 million, indicating a 17.4% improvement from the figure registered a year ago. Robust convention and room rate too bode well for MGM Resorts.

Furthermore, the company’s properties are well diversified within the United States. Particularly, its Las Vegas business is anticipated to perform well in the first quarter backed by an improving economic scenario and increased tourism numbers. Meanwhile, MGM Resorts is consistently making important investments wherever it sees an opportunity. In the first quarter, the company’s solid business model and extensive non-gaming revenue opportunities will continue to drive its performance.

However, increasing competition and high-debt burden remain significant headwinds for the company. Also, higher costs can weigh on its margins and profits in the first quarter.

MGM Resorts International Price, Consensus and EPS Surprise

MGM Resorts International Price, Consensus and EPS Surprise | MGM Resorts International Quote

What Does the Zacks Model Say?

Our proven model does not conclusively show that MGM Resorts is likely to beat earnings estimates in the first quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

MGM Resorts has an Earnings ESP of -0.52% and a Zacks Rank #3, which make surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Poised to Beat Earnings Estimates

Here are some companies from the same sector that are poised for an earnings beat in the upcoming releases:

Red Rock Resorts, Inc. RRR has an Earnings ESP of +4.17% and a Zacks Rank of 3.

Melco Resorts & Entertainment Limited MLCO has an Earnings ESP of +24.00% and a Zacks Rank #3.

Boyd Gaming Corporation BYD has an Earnings ESP of +6.56% and a Zacks Rank #3.

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