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Factors Setting the Tone for MGM Resorts' (MGM) Q2 Earnings

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MGM Resorts International (MGM - Free Report) is scheduled to report second-quarter 2022 results on Aug 3, 2022, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 111.1%.

How are Estimates Placed?

The Zacks Consensus Estimate for the second-quarter earnings is pegged at 24 cents per share. In the prior-year quarter, MGM reported a loss of 13 cents per share.

MGM Resorts International Price and EPS Surprise

 

MGM Resorts International Price and EPS Surprise

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

 

For revenues, the consensus mark is pegged at nearly $3,034 million. The metric suggests an increase of 33.8% from the year-ago quarter’s figure.

Let’s take a look at how things have shaped up in the quarter.

Factors to Note

MGM Resorts’ second-quarter performance is likely to have benefited from sports betting expansion, digitalization efforts and its loyalty program. This and focus on acquisitions (including LeoVegas and The Cosmopolitan of Las Vegas), casino marketing efforts and streamlining initiatives are likely to have aided the company’s performance in the second quarter.

Improved group business and high domestic casino spending are likely to have aided the company’s Las Vegas performance in the second quarter. During the previous quarter, the company reported solid performance in its regional properties on its premium offerings and strength in gaming spend levels. Also, it reported strong weekend occupancies and average daily rate. Given a rise in international leisure trends coupled with a robust event calendar, the momentum is likely to have continued in the second quarter. The Zacks Consensus Estimate for revenues at Las Vegas Strip and Regional operations is pegged at $1,780 million and $920 million, suggesting a year-over-year increase of 77.1% and 7.5%, respectively.

However, increased expenses related to business developments in Japan as well as investments in IT and digital are likely to have hurt margins in the second quarter. Lower contributions from MGM China are likely to have affected the top line in the to-be-reported quarter. The Zacks Consensus Estimate for MGM China is pegged at $279 million, suggesting a year-over-year decline of 10.3%.

What the Zacks Model Unveils

Our proven model does not predict 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.

Earnings ESP: MGM Resorts has an Earnings ESP of -23.14%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Poised to Beat Earnings Estimates

Here are some stocks from the Zacks Consumer Discretionary space that investors may consider as our model shows that these have the right combination of elements to post an earnings beat:

Callaway Golf Company has an Earnings ESP of +2.69% and a Zacks Rank of 2.

Shares of Callaway Golf have declined 29.5% in the past year. ELY’s earnings surpassed the consensus mark in all the trailing four quarters, the average being 955.5%.

Under Armour, Inc. (UAA - Free Report) has an Earnings ESP of +1.05% and a Zacks Rank of 3.

Shares of Under Armour have declined 56.1% in the past year. UAA’s earnings surpassed the consensus mark thrice in the trailing four quarters and missed once, the average surprise being 103.8%.

Dolby Laboratories, Inc. (DLB - Free Report) has an Earnings ESP of +5% and a Zacks Rank #3.

Shares of Dolby Laboratories have declined 22.5% in the past year. DLB’s earnings surpassed the consensus mark thrice in the trailing four quarters and missed once, the average surprise being 14.7%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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