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MGM Resorts (MGM) Q2 Earnings Meet Estimates, Revenues Lag

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MGM Resorts International (MGM - Free Report) reported adjusted earnings of 26 cents for the second quarter of 2018. The Zacks Consensus Estimate for earnings was also pegged at 26 cents. The company reported adjusted earnings of 31 cents in the prior-year quarter.

Total revenues of $2.86 billion lagged the consensus estimate of $2.99 billion by 4.3% but, increased 8.3% year over year. The improvement was backed by higher revenues at MGM China.

MGM China

MGM China’s net revenues increased 32% year over year to $561 million, courtesy of net revenue contribution of $185 million from recently opened MGM Cotai.

The opening of MGM Cotai also facilitated a 42% year-over-year increase in Main floor table games win. VIP table game wins declined 7% from the prior-year quarter, primarily due to a 2.3% decline in VIP win,partially offset by a 19% increase in turnover at MGM Macau.

MGM China’s adjusted property EBITDA (earnings before interest, taxes and amortization) increased 1% to $120 million from $119 million in the prior-year quarter. However, adjusted property EBITDA margin came in at 21.4%, marking a decline of 660 basis points (bps) from the year-ago quarter. Operating margin was 8.3% in the quarter under review.

Domestic Operations

MGM Resorts owns and operates several properties in Las Vegas. It also owns a number of assets in Mississippi and Michigan.

Net revenues of $2.2 billion from the company's domestic resorts increased 3% from the prior-year quarter. Excluding Park MGM, net revenues increased 4% compared with the prior-year quarter. Notably, casino revenues rose 8%, owing to a 14% increase in table game wins and a 5% increase in slot wins, which again was driven by an increase in slot volumes at the company’s other domestic resorts.

Room revenues increased a meager 1%, due to a 2.8% increase in RevPAR (revenue per available room) at the company's Las Vegas Strip resorts. Las Vegas Strip RevPARmovedup 2.7% in the reported quarter, with average daily rate (ADR) increasing3.2%. Occupancy dipped 100 bps.

Adjusted property EBITDA decreased 2% year over year.

Income From Unconsolidated Affiliates – CityCenter Holdings

MGM’s urban complex, CityCenter operates through two segments — Resort and Residential.

Net revenues from CityCenterincreased13% year over year to $344 million,owing to an increase in both casino and non-casino.

Operating income from resort operations was $76 million in the reported quarter compared with $60 million in the prior-year quarter. Adjusted EBITDA from resort operations was $131 million, marking 25% year-over-year rise.

MGM Resorts International Price, Consensus and EPS Surprise

Balance Sheet

MGM Resorts ended the quarter under review with cash and cash equivalents of $1.27 billion as of Jun 30, 2018, compared with $1.49 billion as of Dec 31, 2017.

During the reportedquarter, the company's board of directors approved a quarterly dividend of 12 cents per share, totaling $65 million. During the second quarter, MGM Resorts repurchased $595 million of shares of its common stock.

Zacks Rank & Peer Releases

MGM Resorts currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Las Vegas Sands (LVS - Free Report) reported lower-than-expected second-quarter 2018 earnings, after beating estimates in the trailing five quarters. However, revenues surpassed the Zacks Consensus Estimate for the sixth straight quarter. Adjusted earnings of 74 cents per share increased 1.4% year over year on higher revenues.

Melco's (MLCO - Free Report) second-quarter earnings of 19.8 cents lagged the consensus estimate but increased 23.8% year over year.

Penn National (PENN - Free Report) reported mixed results for the second quarter of 2018, wherein earnings surpassed analysts’ expectations while revenues lagged the same. Adjusted earnings of 57 cents per share surpassed the Zacks Consensus Estimate of 49 cents by 16.3%. Earnings also increased by the same percentage from the year-ago quarter on higher net income and adjusted EBITDA.

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