We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
MGM Resorts (MGM) Up 5.8% Since Earnings Report: Can It Continue?
Read MoreHide Full Article
It has been about a month since the last earnings report for MGM Resorts International (MGM - Free Report) . Shares have added about 5.8% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is MGM due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
MGM Resorts Q4 Earnings Break Even, Revenues Beat
MGM Resorts eported break-even earnings in the fourth quarter of 2017. The Zacks Consensus Estimate was pegged at earnings of 7 cents. The company posted earnings of 11 cents in the prior-year quarter.
Total revenues of $2.6 billion surpassed the Zacks Consensus Estimate of $2.5 billion by 4% and increased 5.5% year over year. The improvement was backed by higher revenues in MGM China and at the company's domestic resorts.
MGM China
MGM China’s net sales increased 10% year over year to $549 million, courtesy of higher revenues from main-floor table games.
Main-floor table games revenues increased 21%, owing to a 10% rise in volume and year-over-year hold percentage increase of 200 basis points (bps) to 21%.
However, VIP table games revenues suffered a fall of 5%, in spite of a turnover increase of 23% in the quarter. Hold percentage declined 60 bps year over year to 3.1%.
MGM China’s adjusted EBITDA (earnings before interest, taxes, and amortization) increased 7% to $147 million.
Domestic Operations
MGM Resorts owns and operates several properties in Las Vegas. Apart from this, it owns a number of assets in Mississippi and Michigan.
Net revenues of $1.9 billion in the company's domestic resorts increased 5% from the prior-year quarter. Notably, casino revenues rose 13% owing to the opening of MGM National Harbor in December 2016.
Room revenues fell 5%. While Las Vegas Strip RevPAR (Revenue per Available Room) decreased 4% in the quarter, average daily rate (ADR) remained flat. However, occupancy dipped 4%.
Operating income at the company's wholly owned domestic resorts deteriorated 2% to $305 million. Also, adjusted EBITDA inched up 1% to $496 million owing to operations at MGM National Harbor.
Income From Unconsolidated Affiliates – CityCenter Holdings
MGM’s urban complex, CityCenter (located in Las Vegas, with 50% stakes owned by the company), operates through two segments — Resort and Residential. Currently, the company has three properties — Aria, Vdara and Mandarin Oriental — under the Resort operations.
Net revenues from CityCenter rose 1% year over year to nearly $306 million on the back of an increase in food and beverage revenues.
Adjusted EBITDA was also up 7% to $97 million.
Balance Sheet
MGM Resorts ended the quarter with cash and cash investments of $1.5 billion as of Dec 31, 2017, compared with $1.4 billion as of Dec 31, 2016.
The company returned $580 million to shareholders through buybacks and dividends during 2017.
On Feb 19, the company approved a 9% hike in the quarterly dividend from $0.11 per share to $0.12 per share totaling $68 million. The dividend will be payable on Mar 15, 2018 to holders of record as of Mar 9.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been three revisions higher for the current quarter compared to one lower.
At this time, MGM has an average Growth Score of C, though it is lagging a lot on the momentum front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending upward for the stock and the magnitude of these revisions indicates a downward shift. Notably, MGM has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
MGM Resorts (MGM) Up 5.8% Since Earnings Report: Can It Continue?
It has been about a month since the last earnings report for MGM Resorts International (MGM - Free Report) . Shares have added about 5.8% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is MGM due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
MGM Resorts Q4 Earnings Break Even, Revenues Beat
MGM Resorts eported break-even earnings in the fourth quarter of 2017. The Zacks Consensus Estimate was pegged at earnings of 7 cents. The company posted earnings of 11 cents in the prior-year quarter.
Total revenues of $2.6 billion surpassed the Zacks Consensus Estimate of $2.5 billion by 4% and increased 5.5% year over year. The improvement was backed by higher revenues in MGM China and at the company's domestic resorts.
MGM China
MGM China’s net sales increased 10% year over year to $549 million, courtesy of higher revenues from main-floor table games.
Main-floor table games revenues increased 21%, owing to a 10% rise in volume and year-over-year hold percentage increase of 200 basis points (bps) to 21%.
However, VIP table games revenues suffered a fall of 5%, in spite of a turnover increase of 23% in the quarter. Hold percentage declined 60 bps year over year to 3.1%.
MGM China’s adjusted EBITDA (earnings before interest, taxes, and amortization) increased 7% to $147 million.
Domestic Operations
MGM Resorts owns and operates several properties in Las Vegas. Apart from this, it owns a number of assets in Mississippi and Michigan.
Net revenues of $1.9 billion in the company's domestic resorts increased 5% from the prior-year quarter. Notably, casino revenues rose 13% owing to the opening of MGM National Harbor in December 2016.
Room revenues fell 5%. While Las Vegas Strip RevPAR (Revenue per Available Room) decreased 4% in the quarter, average daily rate (ADR) remained flat. However, occupancy dipped 4%.
Operating income at the company's wholly owned domestic resorts deteriorated 2% to $305 million. Also, adjusted EBITDA inched up 1% to $496 million owing to operations at MGM National Harbor.
Income From Unconsolidated Affiliates – CityCenter Holdings
MGM’s urban complex, CityCenter (located in Las Vegas, with 50% stakes owned by the company), operates through two segments — Resort and Residential. Currently, the company has three properties — Aria, Vdara and Mandarin Oriental — under the Resort operations.
Net revenues from CityCenter rose 1% year over year to nearly $306 million on the back of an increase in food and beverage revenues.
Adjusted EBITDA was also up 7% to $97 million.
Balance Sheet
MGM Resorts ended the quarter with cash and cash investments of $1.5 billion as of Dec 31, 2017, compared with $1.4 billion as of Dec 31, 2016.
The company returned $580 million to shareholders through buybacks and dividends during 2017.
On Feb 19, the company approved a 9% hike in the quarterly dividend from $0.11 per share to $0.12 per share totaling $68 million. The dividend will be payable on Mar 15, 2018 to holders of record as of Mar 9.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been three revisions higher for the current quarter compared to one lower.
MGM Resorts International Price and Consensus
MGM Resorts International Price and Consensus | MGM Resorts International Quote
VGM Scores
At this time, MGM has an average Growth Score of C, though it is lagging a lot on the momentum front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending upward for the stock and the magnitude of these revisions indicates a downward shift. Notably, MGM has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.