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Gambling Stock Roundup: MGM & LVS' Q2 Picture Disappoints, MLCO & MCRI Earnings Beat

Zacks Equity Research

last week, MGM Resorts International MGM and Las Vegas Sands Corp LVS reported lower-than-expected financial numbers for second-quarter 2019. However, Melco Resorts & Entertainment Limited MLCO and Monarch Casino & Resort, Inc.’s MCRI earnings and revenues surpassed the Zacks Consensus Estimate.

Recap of Last Week’s Most Important Stories

MGM Resorts Q2 Earnings & Revenues Miss Estimates


MGM Resorts reported second-quarter 2019 results, wherein earnings and revenues lagged the Zacks Consensus Estimate. Adjusted earnings of 23 cents per share missed the consensus estimate of 25 cents and also declined 11.5% from the figure registered in the prior-year quarter. Total revenues came in at $3,223.2 million, missing the consensus mark of $3,235 million but increased 13% year over year. This improvement was backed by robust performance of MGM China.

MGM China’s net revenues increased 26% year over year to $706 million owing to net revenue contribution of $316 million from MGM Cotai.

Net revenues at Las Vegas Strip Resorts totaled $1.5 billion, up 1% year over year. Meanwhile, adjusted property EBITDA decreased 4% year over year, while EBITDA margin contracted 145 bps. This decline was primarily due to weaker performance at casino.

Notably, this Zacks Rank #4 (Sell) company ended the second quarter with cash and cash equivalents of $1,160.6 million as of Jun 30, 2019, compared with $1,526.8 million as of Dec 31, 2018.

During the reported quarter, the company's board of directors approved a quarterly dividend of 13 cents per share, totaling $68 million. (Read More: MGM Resorts Earnings & Revenues Miss Estimates in Q2)

Las Vegas Sands’ Earnings & Revenues Lag Estimates in Q2

Las Vegas Sands missed the Zacks Consensus Estimate for second-quarter 2019 earnings and revenues, after delivering a beat in the preceding quarter.

Adjusted earnings came in at 72 cents per share, which declined 2.7% year over year and also missed the Zacks Consensus Estimate of 81 cents. The bottom line was impacted by higher interest expenses. In the quarter, interest expense, net of amounts capitalized, increased to $143 million compared with $93 million in the year-ago quarter.

Net revenues totaled $3,334 million, which fell short of the consensus mark of $3,424 million but improved 0.9% on a year-over-year basis. Top-line growth was primarily driven by increased revenues at casino, rooms, mall as well as Food and beverage. The company also generated solid revenues from Las Vegas operation.

As of Jun 30, 2019, unrestricted cash balances amounted to $4.02 billion. Total debt outstanding (excluding finance leases) was $12 billion. In the reported quarter, capital expenditures totaled $213 million. This was mainly due to construction, development and maintenance activities of $99 million in Macao, $49 million at Marina Bay Sands and $65 million in Las Vegas. (Read more: Las Vegas Sands Stock Down on Q2 Earnings & Revenue Miss)

Las Vegas Sands currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Melco Resorts & Entertainment Q2 Earnings & Revenues Beat Estimates

Melco Resorts & Entertainment reported second-quarter 2019 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. The company reported earnings per share of 24 cents, which surpassed the consensus estimate of 20 cents. Moreover, earnings increased 20% on a year-over-year basis.

Revenues increased 17.3% year over year to $ 1,442.7 million and also outpaced the consensus mark of $1,255 million. The company’s results were driven by robust performances of room, casinos as well as food and beverage.

This Zacks Rank #2 (Buy) company ended the quarter with cash and cash equivalents of $1,449.8 million compared with $1,436.6 million at the end of prior-year quarter. Inventories rose 3.7% to $42.4 million.

Monarch Casino & Resort’s Earnings & Revenues Surpass Estimates in Q2

Monarch Casino & Resort reported better-than-expected second-quarter 2019 results. The company’s adjusted earnings came in at 50 cents per share, surpassing the Zacks Consensus Estimate of 43 cents. However, the bottom line remained flat year over year.

Net revenues totaled $62.8 million, which exceeded the consensus mark of $61 million and also improved 4.8% on a year-over-year basis. The company’s results in the quarter were driven by robust performances of casino, food and beverages as well as hotel.

This Zacks Rank #3 company ended the second quarter with cash and cash equivalents of $26.5 million compared with $30.5 million in the prior-year quarter.

Price Performance

The following table shows the price movement of the major gambling stocks in the last week and the last six months: 

In the last five trading sessions, shares of Las Vegas Sands and Full House Resorts, Inc. FLL lost the most.

However, key sector participants like Century Casinos, Inc. CNTY and Caesars Entertainment Corporation CZR  have been the major gainers in the past six months.

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MGM Resorts International (MGM) : Free Stock Analysis Report
 
Full House Resorts, Inc. (FLL) : Free Stock Analysis Report
 
Century Casinos, Inc. (CNTY) : Free Stock Analysis Report
 
Caesars Entertainment Corporation (CZR) : Free Stock Analysis Report
 
Monarch Casino & Resort, Inc. (MCRI) : Free Stock Analysis Report
 
Las Vegas Sands Corp. (LVS) : Free Stock Analysis Report
 
Melco Resorts & Entertainment Limited (MLCO) : Free Stock Analysis Report
 
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