MGM Resorts (MGM) shares slip in Tuesday's after-hours trading despite beating top and bottom-line earnings estimates. The casino operator attributes a chunk of its revenue to its Las Vegas resorts, seeing increased exposure from major sporting events like the Las Vegas Grand Prix Formula One race.
Yahoo Finance's Josh Schafer, Alexandra Canal, and Pras Subramanian discuss the report.
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Editor's note: This article was written by Luke Carberry Mogan.
Video Transcript
PRAS SUBRAMANIAN: MGM Resorts reported record fourth quarter and full-year results. Here, the stock is down after-hours are 4% there. For the quarter, MGM reported revenue of $4.38 billion, topping estimates, and adjusted EPS of $1.06 a share, again beating Wall Street consensus. The operator said Las Vegas strip revenue of $2.4 billion in Q4 beat last year's totals, powered by that F1 race in October and increased gaming revenue. MGM China also doing well, hitting $983 million in revenue, beating consensus there of 80 by the removal of COVID-19 restrictions in Macau and they add a new gaming table.
So just focusing on Vegas and the strip revenue, I mean, I guess we shouldn't be surprised by that Formula 1 effect there, that whole week of just people like hundreds of thousands of people coming into the strip. I mean, they're used to that kind of volume, but that's a big deal. And also, Super Bowl happened this just last week, so that could be another big kind of catalyst for them next quarter.
ALEXANDRA CANAL: Next year, Super Bowl, the Netflix Cup, that LIV Golf tournament was in Vegas. It seems like everyone is going to Vegas these days. And this seems to be the new hotspot. And MGM, I think, would be a huge benefit.
JOSH SCHAFER: I think it's something that you'll probably hear more about on that earnings call, right?
ALEXANDRA CANAL: Right, they'll single out.
JOSH SCHAFER: Buy what the full expectations from last week, essentially? I'm sure they have a relative idea of what bookings were like last week, what that looks like moving forward for that current quarter. That seems like it would probably be huge for them. And then, also when you think about MGM, one of the things that MGM has and like a Caesars has, that some of the online sportsbooks that we talk about don't have is the brick-and-mortar casino, right?
Getting all of these people to Vegas for these sporting events, like an F1, like the Super Bowl, then you get people on the apps, they can then use it to go to a hotel, go to a real brick-and-mortar casino. I'm curious to learn a little bit more about how that sort of cross-promotion is working for them because that's a little bit of a strategic advantage for MGM, which their sports properties, BetMGM, a little bit of a smaller player in the space compared to DraftKings and FanDuel, but they have that kind of different offering. And how are you leveraging the Vegas boom, I guess, is one of my looming questions.
ALEXANDRA CANAL: The brick and mortar to drive that part of the business. Yeah, no. That should be really interesting on there, as well.
PRAS SUBRAMANIAN: And you have March Madness coming up, too, right? Any kind of--
ALEXANDRA CANAL: A lot of sports. Sports isn't over.
PRAS SUBRAMANIAN: Yeah, yeah, exactly.
JOSH SCHAFER: Oh, the sports betting never ends, guys.
ALEXANDRA CANAL: It never ends.
PRAS SUBRAMANIAN: More betting, more betting.
ALEXANDRA CANAL: Even though we're down on the Super Bowl, it could come up on March Madness. We still have a chance.
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