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MGM Resorts (MGM) Q2 Earnings Top, Revenues Miss Estimates
July 27, 2017

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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.

MGM Resorts’ earnings are benefitting from higher demand at its properties in Las Vegas on the back of improving employment rate trends and increasing tourism numbers in the region. Moreover, diversification of its resort portfolio and non-gaming options bode well. Particularly, the opening of MGM National Harbor, a casino resort, on Dec 8, 2016, should drive revenues. Additionally, the company’s profit growth plan is also poised to further boost profits.

Given the improved operating environment in Macau, the company’s consistent efforts to boost tourism and traffic therein, has started yielding results with revenues at MGM China improving on a year-over-year basis in the last two quarters. In fact, this happened after it witnessed consistent year-over-year declines since the second quarter of 2014.

Though it seems that the worst is over for Macau’s gambling industry, concerns related to the sustainability of revenues from the VIP market still linger, suggesting that it will take some time for the region to return to its former glory.

Investors should note that the consensus estimate for MGM has hardly witnessed any significant movement over the last 60 days. Meanwhile, 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 164.92%. Meanwhile, revenues have surpassed the Zacks Consensus Estimate in three of the trailing four quarters.

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 28 cents, and the company reported adjusted earnings of 31 cents per share. Investors should note that these figures take out stock option expenses.

Revenues: MGM reported revenues of $2.64 billion. This lagged our consensus estimate of $2.66 billion.

Key Stats to Note: In the second quarter of 2017, net revenues at the company's wholly owned domestic resorts increased 22% year over year.

Stock Price Impact: At the time of writing, the stock price of MGM Resorts was down over 3% 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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