MGM Resorts International (MGM - Free Report) is one of the leading companies in the gaming and lodging industry. The company’s properties are well-diversified within U.S. and Macau, which is the only gambling destination in China.
Macau is a key operating region for MGM Resorts. However, gambling revenues in Macau have been soft over the past few quarters due to anti-graft corruption drive undertaken by the Chinese government. However, per the Macau Gaming Inspection and Coordination Bureau, though gross gaming revenues (GGR) fell in July, they rose in August and September on a year-over-year basis, indicating that the Macau market might be on the recovery path.
Nonetheless, MGM Resorts’ earnings are benefitting from improving demand at its properties in Las Vegas, thanks to higher employment rate and rise in the number of tourists. Moreover, a comparatively better performance at main floor and non-gaming segments is somewhat making up for the slowdown in the VIP gaming business in Macau.
Investors should note that the consensus estimate for MGM has been moving slightly downwards over the last 60 days. However, MGM’s earnings have been mostly strong over the past few quarters. In fact, the company posted positive earnings surprises in three of the last four quarters, with an average beat of 83.15%. Meanwhile, revenues have lagged the Zacks Consensus Estimate in all of the trailing four quarters.
MGM RESORTS INT Price and EPS Surprise
MGM currently has a Zacks Rank #3 (Hold) but that could change following MGM Resorts’ earnings report which was just released. You can see the complete list of today’s Zacks #1 Rank stocks here.
We have highlighted some of the key stats from this just-revealed announcement below:
Earnings: MGM beats on earnings. Our consensus earnings estimate called for earnings per share of 8 cents, and the company reported earnings of 58 cents per share. Investors should note that these figures take out stock option expenses.
Revenues: MGM reported revenues of $2.52 billion. This surpassed our consensus estimate of $2.37 billion.
Key Stats to Note: In the third quarter of 2016, net revenues at the company's wholly owned domestic resorts soared 16% year over year while MGM China’s net revenues declined 6% year over year.
Stock Price Impact: At the time of writing, the stock price of MGM Resorts was up nearly 5% during pre-market trading hours following the earnings release.
Check back later for our full write up on this MGM earnings report!
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