MGM Resorts (MGM) Q2 Earnings & Revenues Beat, Rise Y/Y
MGM Resorts International MGM reported impressive second-quarter 2023 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Both metrics surpassed the consensus estimate for the third consecutive quarter. Moreover, the top and bottom lines increased on a year-over-year basis.
Earnings & Revenue Discussion
MGM Resorts reported earnings per share (EPS) of 59 cents, beating the Zacks Consensus Estimate of 53 cents. In the prior-year quarter, the company had reported EPS of 4 cent.
Total revenues were $3,942.2 million, surpassing the Zacks Consensus Estimate of $3,762 million by 4.8%. The top line jumped 20.7% year over year. The upside was primarily driven by growth in business volume and travel activity, primarily at MGM China and Las Vegas Strip Resorts.
MGM China
During the second quarter, MGM China's net revenues surged 418% year over year to $741 million. The upside was attributed to the removal of COVID-related travel restrictions in Macau and rise in visitation. MGM China casino revenues skyrocketed 454% year over year to $670 million.
MGM China's adjusted property earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) amounted to $209 million against ($52) million reported in the prior-year quarter.
MGM Resorts International Price, Consensus and EPS Surprise
MGM Resorts International price-consensus-eps-surprise-chart | MGM Resorts International Quote
Domestic Operations
Net revenues at Las Vegas Strip Resorts during the second quarter were $2.1 billion, flat year over year.
Adjusted property EBITDAR declined 6% year over year to $777 million. Casino revenues in the quarter under review were $492 million, down 1% year over year.
Net revenues from MGM's regional operations totaled $926 million, down 3% from the prior-year quarter’s levels. The decline was primarily due to disposition of Gold Strike Tunica in February 2023. Casino revenues in the quarter came in at $679 million, down 7% from the prior-year quarter’s levels.
Adjusted property EBITDAR was $294 million, down 14% from the year-ago quarter. Adjusted property EBITDAR margin contracted 270 basis points year over year to 31.7%.
Balance Sheet & Share Repurchase
MGM Resorts ended the second quarter with cash and cash equivalents of $3,843.4 million compared with $5,911.9 million reported in 2022-end. The company's long-term debt at the end of the quarter was $6,674 million, down from $7,432.8 million at 2022 end.
During the second quarter of 2023, MGM repurchased nearly 15 million shares for an aggregate of $626 million. As of Jun 30, management stated the availability of $1.4 billion under its February 2023 repurchase program.
Zacks Rank & Key Picks
MGM currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Consumer Discretionary sector are as follows:
Trip.com Group Limited TCOM flaunts a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 147.9%, on average. Shares of TCOM have grown 43% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Trip.com Group’s 2023 sales and EPS suggests increases of 101.6% and 531%, respectively, from the year-ago period’s levels.
Live Nation Entertainment, Inc. LYV sports a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 34.6%, on average. Shares of LYV have declined 11.8% in the past year.
The Zacks Consensus Estimate for Live Nation’s 2024 sales indicates a rise of 13.5% from the year-ago period’s levels.
OneSpaWorld Holdings Limited OSW carries a Zacks Rank #2 (Buy). OSW has a trailing four-quarter earnings surprise of 65.8%, on average. Shares of OSW have soared 37.2% in the past year.
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