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What's in the Offing for MGM Resorts (MGM) in Q2 Earnings?
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MGM Resorts International (MGM - Free Report) is scheduled to report second-quarter 2023 results on Aug 2, 2023, after market close. In the last reported quarter, the company’s earnings per share (EPS) of 44 cents surpassed the Zacks Consensus Estimate of 4 cents.
MGM surpassed earnings estimates twice but missed the same twice in all of the trailing four quarters, the average surprise being 81%.
The Trend in Estimate Revision
For the second quarter of 2023, the Zacks Consensus Estimate for adjusted EPS increased to 53 cents from 50 cents in the past 30 days. In the prior-year quarter, the company had reported an adjusted EPS of 3 cents. The consensus mark for revenues is pegged at $3.76 billion, suggesting an increase of 15% from the prior-year quarter’s reported figure of $3.27 billion.
MGM’s second-quarter performance is likely to have benefited from a strong Las Vegas market, international expansion and solid Sports betting and iGaming prospects. During the previous quarter, Las Vegas Strip Resorts' net income was $2,176.2 million, up 31% year over year. The uptick can be attributed to an increase in business volume, travel and the opening of The Cosmopolitan. During the quarter, net revenues from regional operations totaled $945.8 million, up 6% from the prior-year quarter’s levels. Given a rebound in the convention business, the momentum is likely to have continued in the to-be-reported quarter.
For second-quarter 2023, our model predicts Las Vegas Strip and Regional operations’ revenues to grow 9.5% to $2,339.2 million and 2% to $978.9 million, respectively. We expect revenues from MGM China to increase 20.3% year over year to 172.1 million.
Increased focus on Sports betting and iGaming is likely to have aided the company’s performance in the to-be-reported quarter. As of March 2023, BetMGM achieved a market share of 28% in the iGaming and 17% in the U.S. sports betting space. During the first quarter, net gaming revenues from BetMGM came in at $476 million, up 76% from 2022 levels. Attributes such as robust player economics and a successful bonus optimization strategy added to the positives. Given the continued development progress and initiatives to improve the interface and customer experience, the momentum is likely to have continued in the second quarter.
However, high costs are likely to have affected the company’s margins in the -to-be reported quarter.
Per our model, expenses for rooms, casino and food and beverage in second-quarter 2023 are likely to increase 5.9%, 42% and 7%, respectively, on a year-over-year basis.
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. This is exactly 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 an Earnings ESP of +19.43% and carries a Zacks Rank #2.
Other Stocks With Favorable Combinations
Here are some other companies in the Zacks Consumer Discretionary sector that too have the right combination of elements to post an earnings beat on their respective quarters to be reported.
TSQ’s earnings for the to-be-reported quarter are expected to decline 32.4%. The company reported better-than-expected earnings in three of the last four quarters and missed on one occasion, the average surprise being 19.8%.
Electronic Arts Inc. (EA - Free Report) has an Earnings ESP of +2.54% and carries a Zacks Rank #2.
EA’s earnings for the to-be-reported quarter are expected to increase 215.6%. The company reported better-than-expected earnings in two of the last four quarters and missed on other two occasion, the average surprise being 7.3%.
DraftKings Inc. (DKNG - Free Report) has an Earnings ESP of +6.60% and a Zacks Rank #2.
DKNG’s earnings for the to-be-reported quarter are expected to increase 50%. The company reported better-than-expected earnings in three of the last four quarters and missed on one occasion, the average surprise being 15.3%.
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What's in the Offing for MGM Resorts (MGM) in Q2 Earnings?
MGM Resorts International (MGM - Free Report) is scheduled to report second-quarter 2023 results on Aug 2, 2023, after market close. In the last reported quarter, the company’s earnings per share (EPS) of 44 cents surpassed the Zacks Consensus Estimate of 4 cents.
MGM surpassed earnings estimates twice but missed the same twice in all of the trailing four quarters, the average surprise being 81%.
The Trend in Estimate Revision
For the second quarter of 2023, the Zacks Consensus Estimate for adjusted EPS increased to 53 cents from 50 cents in the past 30 days. In the prior-year quarter, the company had reported an adjusted EPS of 3 cents. The consensus mark for revenues is pegged at $3.76 billion, suggesting an increase of 15% from the prior-year quarter’s reported figure of $3.27 billion.
MGM Resorts International Price and EPS Surprise
MGM Resorts International price-eps-surprise | MGM Resorts International Quote
Factors to Note
MGM’s second-quarter performance is likely to have benefited from a strong Las Vegas market, international expansion and solid Sports betting and iGaming prospects. During the previous quarter, Las Vegas Strip Resorts' net income was $2,176.2 million, up 31% year over year. The uptick can be attributed to an increase in business volume, travel and the opening of The Cosmopolitan. During the quarter, net revenues from regional operations totaled $945.8 million, up 6% from the prior-year quarter’s levels. Given a rebound in the convention business, the momentum is likely to have continued in the to-be-reported quarter.
For second-quarter 2023, our model predicts Las Vegas Strip and Regional operations’ revenues to grow 9.5% to $2,339.2 million and 2% to $978.9 million, respectively. We expect revenues from MGM China to increase 20.3% year over year to 172.1 million.
Increased focus on Sports betting and iGaming is likely to have aided the company’s performance in the to-be-reported quarter. As of March 2023, BetMGM achieved a market share of 28% in the iGaming and 17% in the U.S. sports betting space. During the first quarter, net gaming revenues from BetMGM came in at $476 million, up 76% from 2022 levels. Attributes such as robust player economics and a successful bonus optimization strategy added to the positives. Given the continued development progress and initiatives to improve the interface and customer experience, the momentum is likely to have continued in the second quarter.
However, high costs are likely to have affected the company’s margins in the -to-be reported quarter.
Per our model, expenses for rooms, casino and food and beverage in second-quarter 2023 are likely to increase 5.9%, 42% and 7%, respectively, on a year-over-year basis.
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. This is exactly 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 an Earnings ESP of +19.43% and carries a Zacks Rank #2.
Other Stocks With Favorable Combinations
Here are some other companies in the Zacks Consumer Discretionary sector that too have the right combination of elements to post an earnings beat on their respective quarters to be reported.
Townsquare Media, Inc. (TSQ - Free Report) has an Earnings ESP of +4.17% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
TSQ’s earnings for the to-be-reported quarter are expected to decline 32.4%. The company reported better-than-expected earnings in three of the last four quarters and missed on one occasion, the average surprise being 19.8%.
Electronic Arts Inc. (EA - Free Report) has an Earnings ESP of +2.54% and carries a Zacks Rank #2.
EA’s earnings for the to-be-reported quarter are expected to increase 215.6%. The company reported better-than-expected earnings in two of the last four quarters and missed on other two occasion, the average surprise being 7.3%.
DraftKings Inc. (DKNG - Free Report) has an Earnings ESP of +6.60% and a Zacks Rank #2.
DKNG’s earnings for the to-be-reported quarter are expected to increase 50%. The company reported better-than-expected earnings in three of the last four quarters and missed on one occasion, the average surprise being 15.3%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.