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MGM Resorts (MGM) Stock Gains on Q1 Earnings & Revenues Beat

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MGM Resorts International MGM reported first-quarter 2022 results, wherein earnings and revenues beat the Zacks Consensus Estimate. While the bottom line surpassed the consensus estimates for the eighth straight quarter, the top line beat the same for the sixth consecutive quarter. Earnings and revenues improved on a year-over-year basis. Following the results, shares of the company increased 1.3% in the after-hours trading session on May 2.

The company's results in the quarter benefited from robust domestic operations, courtesy of weekend demand and a better mix of business. The company announced that its midweek business has been improving every quarter, and its group base business has been growing following a tough January.

Bill Hornbuckle, CEO and president of MGM Resorts International, has said, "We announced this morning the tender offer for100% of the shares of LeoVegas which will allow us to expand into international online gaming with a world class management team, strong IT platform and growth prospects. We remain focused on achieving our vision to be the world's premier gaming entertainment company."

Earnings & Revenue Discussion

MGM Resorts reported adjusted earnings per share of 1 cent, against the Zacks Consensus Estimate of a loss of 9 cents. In the prior-year quarter, the company had reported an adjusted loss of 68 cents per share.

Total revenues were $2,854.3 million, which surpassed the Zacks Consensus Estimate of $2,749 million. The top line soared 73.2% from $1,647.7 million in the year-ago period. The upside was primarily driven by the rise in Casino, BetMGM, and other sports betting and iGaming revenues.

MGM Resorts International Price, Consensus and EPS Surprise

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

MGM Resorts International price-consensus-eps-surprise-chart | MGM Resorts International Quote

MGM China

MGM China's net revenues fell 9% year over year to $268 million. The figure is down 63% compared to the first quarter of 2019. VIP Table Games turnover declined 59% year over year to $963 million. MGM China casino revenues decreased 12% year over year to $231 million.

MGM China's adjusted property EBITDAR (Earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs) amounted to ($25.7) million against adjusted property EBITDAR of $4.8 million in the prior-year quarter.

Domestic Operations

Net revenues at Las Vegas Strip Resorts during the first quarter were $1.7 billion, up 205% year over year, owing to the addition of Aria. The company's revenues were negatively impacted by the decline in business volume and travel due to the spread of the Omicron variant at the beginning of the quarter. Adjusted property EBITDAR improved a whopping 449% year over year to $594 million. Casino revenues in the quarter under review were $475 million, up 105% year over year.

During the quarter under review, net revenues from the company's regional operations totaled $891 million, up 25% from the prior-year quarter. This growth can primarily be attributable to the elimination of mandated operational as well as capacity restrictions and an increase in travel.

Adjusted property EBITDAR was $313 million, up 29% year over year. Adjusted property EBITDAR margin expanded 120 basis points year over year to 35.2%.

Casino revenues in the quarter under review rose 18% from the year-ago level of $704 million.

Balance Sheet & Share Repurchase

MGM Resorts ended the first quarter with cash and cash equivalents of $2,719.1 million compared with $4,703.1 million on Dec 31, 2021. The company's long-term debt at the end of the quarter stood at $10,507.1 million, down from $11,770.8 million as of Dec 31, 2021.

During the first quarter, the company repurchased nearly $23 million of shares at an average price of $42.92 per share for $1 billion.

Zacks Rank & Key Picks

MGM Resorts carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Consumer Discretionary sector are Funko, Inc. FNKO, Bluegreen Vacations Holding Corporation BVH and Clarus Corporation CLAR.

Funko sports a Zacks Rank #1 (Strong Buy) at present. FNKO has a trailing four-quarter earnings surprise of 96.2%, on average. Shares of the company have declined 20.6% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Funko's current financial year sales and EPS suggests growth of 22.6% and 26.8%, respectively, from the year-ago period's reported levels.

Bluegreen Vacations sports a Zacks Rank #1 at present. BVH has a trailing four-quarter earnings surprise of 425.1%, on average. The stock has surged 42.4% in the past year.

The Zacks Consensus Estimate for BVH's current financial year sales and EPS indicates growth of 8.3% and 20.8%, respectively, from the year-ago period's reported levels.

Clarus sports a Zacks Rank #1 at present. The company has a trailing four-quarter earnings surprise of 12.3%, on average. Shares of the company have increased 21% in the past year.

The Zacks Consensus Estimate for CLAR's 2022 sales and EPS suggests growth of 25.3% and 23.1%, respectively, from the year-ago period's levels.


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