MGM Resorts International (MGM - Free Report) reported mixed second-quarter 2020 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues lagged the same. While the bottom line beat the consensus mark after missing in the preceding two quarters, the top line lagged the estimate for the fifth consecutive quarter. Following the results, not much movement was noticed on the company’s share price.
Closure of the company’s properties owing to the coronavirus pandemic negatively impacted the results. The company started reopening its properties across the United States during the second quarter. Ever since then, it has witnessed better-than-expected demand. The company is optimistic regarding its long-term growth potential.
Earnings & Revenues Discussion
MGM Resorts reported adjusted loss per share of $1.52, narrower than the Zacks Consensus Estimate of a loss of $1.65. In the prior-year quarter, the company had reported adjusted earnings per share of 23 cents.
Total revenues were $289.8 million, which missed the Zacks Consensus Estimate of $443 million. Moreover, the top line declined 91% year over year. The downside can primarily be attributed to the temporary shutdown of the company’s domestic operations and other restrictions in Macau owing to the coronavirus pandemic. Moreover, travel restrictions impacted the company’s performance in the quarter under review.
MGM Resorts International Price, Consensus and EPS Surprise
MGM China’s net revenues declined 95% year over year to $33 million, owing to travel and entry restrictions in Macau, and other operational restrictions related to the coronavirus pandemic. VIP Table Games Hold adjusted MGM China net revenues plunged 96% year over year to $32 million.
MGM China’s adjusted property EBITDAR (Earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs) loss was $116 million. In the prior-year quarter, the company had reported adjusted property EBITDAR of $173 million.
Net revenues at Las Vegas Strip Resorts during the second quarter were $151 million, down 90% year over year. Adjusted property EBITDAR loss of $104 million compared unfavorably with adjusted property EBITDAR of $418 million in the prior-year quarter. However, adjusted property EBITDAR margin expanded 450 basis points year over year.
During quarter under review, net revenues from the company's regional operations totaled $89 million, down 90% from the prior-year quarter. Adjusted property EBITDAR came in at a loss of $112 million. In the prior-year quarter, the company had reported adjusted property EBITDAR of $261 million. However, adjusted property EBITDAR margin expanded 880 basis points year over year.
Casino revenues in the quarter under review fell 80% year over year at the company's Las Vegas Strip Resorts primarily due to coronavirus-induced shutdowns and other operational restrictions on account of the pandemic. Moreover, slots handle declined 83%. Notably, slots handle decreased 92% at its Regional Operations.
MGM Resorts ended the second quarter with cash and cash equivalents of $4,835.5 million compared with $2,329.6 million on Dec 31, 2019. The company’s long-term debt at the end of quarter stands at $11,339.6 million, compared with $11,168.9 million as of Dec 31, 2019.
Zacks Rank & a Key Pick
MGM Resorts, which shares space with Las Vegas Sands Corp. (LVS - Free Report) and Wynn Resorts, Limited (WYNN - Free Report) , currently has a Zacks Rank #5 (Strong Sell). A better-ranked stock in the same space includes Monarch Casino & Resort, Inc. (MCRI - Free Report) , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Monarch Casino & Resort have gained 20.8% in the past three months.
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