MGM reports improved fourth-quarter earnings but misses estimates
Paced by revenue generated by its new National Harbor casino near Washington D.C. and the improving performance of its 10 Las Vegas properties, MGM Resorts International on Thursday reported improved fourth-quarter earnings from last year.
But the company missed earnings estimates, sending investors into sell mode. MGM shares closed down $2.74, 9.3 percent, to $26.86 on seven times greater volume than average.
The company missed estimates by 10 cents a share, but beat revenue projections by $20 million.
MGM Chairman and CEO Jim Murren said the companywide improvements shown in the quarter that ended Dec. 31 bodes well for 2017.
“We are excited about the outlook for 2017, including the full year contributions from MGM National Harbor and Borgata, the continued favorable Las Vegas dynamics supported by our investments including T-Mobile Arena and the Park Theater, the opening of MGM Cotai in Macau, and our persistent drive for continuous improvement throughout all aspects of our company,” Murren said in a statement announcing the company’s earnings.
The company opened National Harbor on Dec. 8 to stellar reviews and on Aug. 1 it completed the acquisition of Boyd Gaming’s 50 percent share of ownership of Borgata, considered Atlantic City’s top property.
The company also pushed back the opening of its new MGM Cotai property in Macau from the first half of the year to later in 2017.
MGM maintained an 89 percent occupancy rate at its Las Vegas properties through the fourth quarter while the average daily room rate climbed $5 to $157.
With more than 38,000 rooms in its Las Vegas inventory, MGM has the largest resort presence in Southern Nevada and is the state’s largest employer.
The company reported net income of $69.9 million, 4 cents a share, on revenue of $2.46 billion, compared with a net loss of $1.47 billion, $1.38 a share, on revenue of $2.19 billion a year ago.
For the year, the company showed net income of $1.24 billion, $1.94 a share, compared with a net loss of $1.05 billion, 82 cents a share, in 2015.
MGM on March 10 will pay an 11-cent-per-share dividend to shareholders of record on March 10.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.
