We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
MGM Resorts (MGM) Q1 Earnings: Macau Operations Hold Key
Read MoreHide Full Article
MGM Resorts International (MGM - Free Report) is scheduled to report first-quarter 2018 results on Apr 26, before market opens. In the previous quarter, the company’s earnings missed the Zacks Consensus Estimate by 100%.
What to Expect?
The Zacks Consensus Estimate for the quarter under review is pegged at 31 cents, which is lower than 38 cents in the year-ago quarter. However, the consensus mark has witnessed an upward revision of 1 cent over the past 30 days. Analysts polled by Zacks expect revenues of nearly $2,799 million, up 3.3% from the prior-year quarter.
Let’s take a look at how the company’s top and bottom lines will shape up in the to-be-reported quarter.
Factors at Play
MGM Resorts’ top line in the first quarter is expected to be driven by strong business model, extensive non-gaming revenue opportunities, high quality assets and attractive property locations. Further, maximization of digital technology is likely to boost the company’s performance. In fact, over the past few years, MGM Resorts has taken various initiatives to align every recognized brand into one global entertainment brand. This, in turn, resulted in a disciplined business model with a unified view of strategy.
Moreover, MGM Resorts derives a solid share of its revenues from Macau — the largest gaming destination in the world — which is likely to continue in the soon-to-be reported quarter. Per the Macau Gaming Inspection and Coordination Bureau, gross gaming revenues increased in all the three months of the first quarter, thus continuing with the revival in Macau. This might boost first-quarter revenues at MGM China.
However, MGM Resorts, which owns and operates several properties in Las Vegas, is likely to witness revenues decline in the region. The company had earlier stated that revenues from Las Vegas are likely to decline in the range of 3-5%. Moreover, revenue per available room growth (ReVPAR) from the region is expected to decrease by 4-6%.
On the earnings front, the company is likely to witness a sharp decline in the first quarter. Also, MGM Resorts has been grappling with high labor costs and expenses associated with technological initiatives. These costs are likely to put pressure on the company’s margins in the to-be-reported quarter and hurt the bottom line. Higher costs associated with Monte Carlo construction might weigh on the company’s margins as well.
Furthermore, heavy reliance on debt financing remains a concern. The company’s cash and cash equivalents as of Dec 31, 2017 were nearly $1.4 billion compared with a much higher long-term debt of $12.8 billion. Therefore, any severe slowdown in future macroeconomic and credit market conditions are likely to affect the company’s ability to pay or refinance its debt.
MGM Resorts International Price, Consensus and EPS Surprise
Our proven model does not show that MGM Resorts is likely to beat earnings estimates this quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. 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 -0.87%. Although, the company’s Zacks Rank #3 increases the predictive power of ESP, we need to have a positive ESP to be confident about an earnings surprise.
Stocks to Consider
Here are a few other stocks from the Consumer Discretionary sector that investors may consider, as our model shows that they also have the right combination of elements to post an earnings beat this quarter:
Royal Caribbean (RCL - Free Report) has an Earnings ESP of +0.50% and a Zacks Rank #2. The company is slated to report its quarterly numbers on Apr 26.
Extended Stay America has an Earnings ESP of +3.50% and a Zacks Rank of 3. The company is scheduled to report its quarterly numbers on Apr 26.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
MGM Resorts (MGM) Q1 Earnings: Macau Operations Hold Key
MGM Resorts International (MGM - Free Report) is scheduled to report first-quarter 2018 results on Apr 26, before market opens. In the previous quarter, the company’s earnings missed the Zacks Consensus Estimate by 100%.
What to Expect?
The Zacks Consensus Estimate for the quarter under review is pegged at 31 cents, which is lower than 38 cents in the year-ago quarter. However, the consensus mark has witnessed an upward revision of 1 cent over the past 30 days. Analysts polled by Zacks expect revenues of nearly $2,799 million, up 3.3% from the prior-year quarter.
Let’s take a look at how the company’s top and bottom lines will shape up in the to-be-reported quarter.
Factors at Play
MGM Resorts’ top line in the first quarter is expected to be driven by strong business model, extensive non-gaming revenue opportunities, high quality assets and attractive property locations. Further, maximization of digital technology is likely to boost the company’s performance. In fact, over the past few years, MGM Resorts has taken various initiatives to align every recognized brand into one global entertainment brand. This, in turn, resulted in a disciplined business model with a unified view of strategy.
Moreover, MGM Resorts derives a solid share of its revenues from Macau — the largest gaming destination in the world — which is likely to continue in the soon-to-be reported quarter. Per the Macau Gaming Inspection and Coordination Bureau, gross gaming revenues increased in all the three months of the first quarter, thus continuing with the revival in Macau. This might boost first-quarter revenues at MGM China.
However, MGM Resorts, which owns and operates several properties in Las Vegas, is likely to witness revenues decline in the region. The company had earlier stated that revenues from Las Vegas are likely to decline in the range of 3-5%. Moreover, revenue per available room growth (ReVPAR) from the region is expected to decrease by 4-6%.
On the earnings front, the company is likely to witness a sharp decline in the first quarter. Also, MGM Resorts has been grappling with high labor costs and expenses associated with technological initiatives. These costs are likely to put pressure on the company’s margins in the to-be-reported quarter and hurt the bottom line. Higher costs associated with Monte Carlo construction might weigh on the company’s margins as well.
Furthermore, heavy reliance on debt financing remains a concern. The company’s cash and cash equivalents as of Dec 31, 2017 were nearly $1.4 billion compared with a much higher long-term debt of $12.8 billion. Therefore, any severe slowdown in future macroeconomic and credit market conditions are likely to affect the company’s ability to pay or refinance its debt.
MGM Resorts International Price, Consensus and EPS Surprise
MGM Resorts International Price, Consensus and EPS Surprise | MGM Resorts International Quote
What Does the Zacks Model Unveil?
Our proven model does not show that MGM Resorts is likely to beat earnings estimates this quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. 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 -0.87%. Although, the company’s Zacks Rank #3 increases the predictive power of ESP, we need to have a positive ESP to be confident about an earnings surprise.
Stocks to Consider
Here are a few other stocks from the Consumer Discretionary sector that investors may consider, as our model shows that they also have the right combination of elements to post an earnings beat this quarter:
Wynn Resorts (WYNN - Free Report) has an Earnings ESP of +5.45% and a Zacks Rank #3. The company is scheduled to report its quarterly numbers on Apr 24. You can see the complete list of today’s Zacks #1 Rank stocks here.
Royal Caribbean (RCL - Free Report) has an Earnings ESP of +0.50% and a Zacks Rank #2. The company is slated to report its quarterly numbers on Apr 26.
Extended Stay America has an Earnings ESP of +3.50% and a Zacks Rank of 3. The company is scheduled to report its quarterly numbers on Apr 26.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>