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Melco Crown (MPEL) Q3 Earnings & Revenues Beat, Up Y/Y

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Melco Crown Entertainment Limited reported third-quarter 2016 earnings per share of 13 cents, which outpaced the Zacks Consensus Estimate of 4 cents by a whopping 225%. Earnings increased 18.2% over the prior-year quarter.

Meanwhile, quarterly net revenue of $1.15 billion surpassed the Zacks Consensus Estimate of $1.13 billion by 1.8%. This marked an increase of nearly 22% on a year-over-year basis.

The year-over-year improvement in the top line was primarily driven by contributions from Studio City, launched in Oct 2015, as well as higher casino revenues at City of Dreams Manila. These upsides were, however, partially offset by lower casino revenues at City of Dreams Macau and Altira Macau.

Adjusted Property EBITDA (earnings before interest, taxes, and amortization) was $289.2 million in the quarter under review, up 22% year over year. The upside came mainly on the back of increased contribution from the newly launched Studio City and fully-operating City of Dreams Manila.


Segment Details

City of Dreams Macau: Net revenue at City of Dreams was $621.2 million, down 6.7% year over year. Adjusted EBITDA was $170.4 million in the third quarter, representing an 11% year-over-year decrease.

Rolling chip volumes totaled $10.6 billion, up nearly 14% year over year. The rolling chip win rate was 2.6% compared with 2.9% in the year-ago quarter.

Altira Macau: Net revenue at Altira Macau was $128.8 million, down 8.2% year over year. Altira Macau generated adjusted EBITDA of $14 million in the third quarter, up 5.3% on a year-over-year basis.

Rolling chip volume was $4.5 billion, down 13.5% from the prior-year quarter. The rolling chip win rate was 3.2% compared with 3.0% in the year-ago quarter.

Mocha Clubs: Net revenue from Mocha Clubs was $31.8 million, down 11.9% year over year. Adjusted EBITDA of $7.0 million was also down 17.7%.

Studio City: Studio City started operations on Oct 27, 2015. For the third quarter, net revenue at Studio City was $229.5 million, and its adjusted EBITDA was $52.7 million.

Mass-market table games drop was $657.6 million, while the mass-market table games hold percentage was 25.5% in the quarter. Total non-gaming revenue at Studio City in the quarter was $58.5 million.

City of Dreams Manila: For the third quarter, net revenue at City of Dreams Manila was $131.0 million, up 42.9% year over year. Adjusted EBITDA was $45 million, up substantially from the year-ago quarter, thanks to increased casino revenues.

Rolling chip volume totaled $1.6 billion, up from $1.2 billion in the year-ago quarter. The rolling chip win rate was 4.0% compared with the year-ago level of 2.9%.

MELCO CROWN ENT Price, Consensus and EPS Surprise

Zacks Rank & Stocks to Consider

Melco Crown presently has a Zacks Rank #3 (Hold).

Better-ranked stocks in the gaming industry include Churchill Downs Inc. (CHDN - Free Report) , Monarch Casino & Resort Inc. (MCRI - Free Report) and Boyd Gaming Corporation (BYD - Free Report) .

Churchill Down’s current year growth estimate is pegged at 55.5% while the gaming industry’s average stands at a negative rate of 3.8%. It sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Monarch Casino also sports a Zacks Rank #1. It surpassed/met the Zacks Consensus Estimate for earnings in three of the trailing four quarters, with an average beat of 9.61%.

Boyd Gaming recorded a positive earnings surprise of 16.67% for the quarter-ended Sep 2016. It currently carries a Zacks Rank #2 (Buy).

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