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Melco Resorts (MLCO) Q2 Earnings Lag, Sales Beat Estimates

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Melco Resorts & Entertainment Limited (MLCO - Free Report) operates casino gaming and entertainment resort facilities in Asia.

Notably, Melco Resorts revenues have been hurt by its sluggish performance in Macau over the past few quarters. Nevertheless, per the Macau Gaming Inspection and Coordination Bureau, gross gaming revenues (GGR) rose in all the three months of the quarter, indicating that the Macau market might be on the recovery path. Still, it will take some time for the region to return to its former glory as concerns related to the sustainability of revenues from the VIP market linger.

Even so, a comparatively better performance at the non-gaming segments like rooms and food and beverages, are somewhat driving revenues. Also, the company’s cost-control efforts including effective management of marketing expenses are boosting profits and margins.

Investors should note that the consensus estimate for MLCO has been rising over the last 60 days. Meanwhile, MLCO’s earnings have been strong over the past few quarters. In fact, the company posted positive earnings surprises in each of the last four quarters, with an average beat of 130.42%. Revenues also outpaced the Zacks Consensus Estimate in three of the trailing four quarters.

Melco Crown Entertainment Limited Price and EPS Surprise

MLCO currently has a Zacks Rank #1 (Strong Buy) but that could change following Melco 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: MLCO missed on earnings. Our consensus earnings estimate called for earnings per share of 20 cents, and the company reported earnings of 16 cents per share. Investors should note that these figures take out stock option expenses.

Revenues: MLCO reported revenues of $1.30 billion. This surpassed our consensus estimate of $1.21 billion.

Key Stats to Note: Adjusted Property EBITDA was $329.5 million in the second quarter of 2017, up 34% year over year. The upside came mainly on the back of better performance in group-wide rolling chip segment.

Stock Price Impact: At the time of writing, the stock price of Melco Resorts was down 2.4% during pre-market trading hours following the earnings release.

Check back for our full write up on this MLCO earnings report later!

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