MGM Resorts (MGM) Stock Rises on Q1 Earnings & Revenue Beat

Shares of MGM Resorts International MGM were up over 4% in yesterday’s trading session after the company posted better-than-expected results for the first quarter of 2017.

Earnings and Revenue Discussion

MGM Resorts posted adjusted earnings of 38 cents per share which surpassed the Zacks Consensus Estimate of 26 cents by 46.2%. Moreover, earnings were significantly above the year-ago quarter figure on account of higher revenues.
 

Total revenue of $2.71 billion beat the Zacks Consensus Estimate of $2.61 billion by nearly 4% and jumped 22.6% year over year. The upside reflects a significant increase in revenues from the company’s Las Vegas operations and MGM China as well.

Adjusted property EBITDA (earnings before interest, taxes, and amortization) at MGM Resorts’ wholly owned domestic resorts was $648 million, up 34% year over year. The Profit Growth Plan that commenced in Jul 2015 continues to pay off, which is reflected through improving profits.

MGM China

Notably, the company owns approximately 56% of MGM China Holdings Limited, the owner of MGM Macau resort and casino, and is developing a gaming resort in Cotai.

MGM China’s net revenue rose 7% year over year to $502 million due to higher revenues from main-floor table games, somewhat offset by decrease in revenues from VIP gamblers.

Main-floor table games revenues increased 17% on the back of hold percentage increase of 420 basis points (bps) year over year to 22.2%.

Meanwhile, VIP table games revenues witnessed a decline of 5% as turnover plunged 16% in the quarter. However, hold percentage increased 40 basis points (bps) year over year to 3.4%.

MGM China’s adjusted EBITDA increased 25% to $143 million.

Domestic Operations

MGM Resorts owns and operates several properties in Las Vegas. Apart from this, it also owns a number of assets in Mississippi and Michigan.

Net revenue of $2.1 billion at the company's domestic resorts increased 29% over the prior-year quarter. This rise in revenues marks an increase of 6% on a same-store basis, excluding contributions from Borgata Hotel Casino and Spa and MGM National Harbor.

Moreover, casino revenues from wholly owned domestic resorts surged a significant 50% due to the acquisition of Borgata, opening of MGM National Harbor and increasing revenues in both table games and slots.

Room revenues also increased 15%, primarily attributable to around 9% rise each in Las Vegas Strip RevPAR (Revenue per Available Room) and average daily rate. Notably, occupancy remained flat.

While operating income at the company's wholly owned domestic resorts increased 30.7% to $477 million, adjusted EBITDA increased 34% to $648 million.

Income from Unconsolidated Affiliates – CityCenter Holdings

MGM’s urban complex, CityCenter (located in Las Vegas, with 50% owned by the company) operates through two segments, Resort and Residential. Under the Resort operations, the company has three properties, namely, Aria, Vdara and Mandarin Oriental.

Net revenue from CityCenter rose 8% year over year to nearly $326 million on the back of increase in casino, rooms, and food and beverage revenues, partly offset by a decline in entertainment revenues due to the Apr 2016 Zarkana show closure.

Adjusted EBITDA was also up 22% to $112 million.

MGM Resorts International Price, Consensus and EPS Surprise

 

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

Zacks Rank & Stocks to Consider

MGM Resorts presently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the sector include Boyd Gaming Corporation BYD, Century Casinos, Inc. CNTY and Penn National Gaming, Inc. PENN holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Boyd Gaming’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average beat of 14.27%. Further, for 2017, EPS is anticipated to increase 24.8%.

The Zacks Consensus Estimate for Century Casinos’ 2017 earnings climbed 27.3% over the last 60 days. Further, for 2017, EPS is projected to increase 47.4%.

The Zacks Consensus Estimate for Penn National Gaming’s 2017 earnings climbed 27.5%, over the past 60 days. Moreover, the company’s earnings surpassed the same in each of the last four quarters, with an average beat of 67.45%.

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MGM Resorts International (MGM): Free Stock Analysis Report
 
Century Casinos, Inc. (CNTY): Free Stock Analysis Report
 
Boyd Gaming Corporation (BYD): Free Stock Analysis Report
 
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