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Dismal Visitation to Hurt MGM Resorts' (MGM) Q4 Earnings

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MGM Resorts International (MGM - Free Report) is scheduled to report fourth-quarter 2020 results on Feb 10. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 1.8%.

Q4 Estimates

The Zacks Consensus Estimate for fourth-quarter bottom line is pegged at a loss of 96 cents. Notably, it had reported earnings of 8 cents in the prior-year quarter. Over the past 30 days, the company’s earnings estimates have been revised downward by 31 cents. The consensus mark for revenues stands at $1,472 million, suggesting a decline of 53.8% from the year-ago reported figure.

Factors to Note

The company’s fourth-quarter performance is likely to reflect negative impacts of temporary closure of certain domestic properties, low visitation in Macau and domestic market on account of the coronavirus pandemic, and high operating expenses. Moreover, travel restrictions might have weighed on the to-be-reported quarter’s performance.

However, robust demand for sports betting and iGaming may have benefited the company’s performance in the quarter to be reported. The company continues to focus on sports betting expansion. In September, sports betting and iGaming market share were approximately 18% in the states in which it operates. The company has also unveiled a streamlined betting experience on Yahoo Sports.

Dismal performance of MGM China, Las Vegas Strip Resorts and Regional operations may have weighed on the company’s fourth-quarter performance. The Zacks Consensus Estimate for Las Vegas Strip, MGM China and Regional operations’ revenues are pegged at $533 million, $213 and 644 million, suggesting year-over-year declines of 63.1%, 70.7% and 28.4%, respectively. Moreover, sharp increase in expenses might get reflected in the company’s to-be-reported quarter’s results. Meanwhile, MGM Resorts has been consistently making important investments to make the most of opportunities.

MGM Resorts International Price and EPS Surprise MGM Resorts International Price and EPS Surprise

MGM Resorts International price-eps-surprise | MGM Resorts International Quote

What the Zacks Model Unveils

Our proven model predicts an earnings beat for MGM Resorts this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

MGM Resorts has a Zacks Rank #3 and an Earnings ESP of +3.54%.

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