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MGM Resorts (MGM) Stock Down on Q1 Earnings & Revenues Miss
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MGM Resorts International (MGM - Free Report) reported first-quarter 2020 results, wherein both earnings and revenues missed the Zacks Consensus Estimate. While the top line missed the consensus mark for the fourth consecutive quarter, the bottom line lagged the same for the second straight quarter. Following the results, the company’s shares declined 3.7% in after-hour trading session.
The company commenced the quarter on a strong note. However, closure of the company’s properties due to the coronavirus pandemic negatively impacted the results. The company announced it is too early to predict the opening dates of its domestic properties.
Earnings & Revenues Discussion
MGM Resorts reported adjusted loss per share of 45 cents, wider than the Zacks Consensus Estimate of a loss of 8 cents. In the prior-year quarter, the company had reported adjusted earnings per share of 14 cents.
Total revenues were $2,252.8 million, which missed the Zacks Consensus Estimate of $2,543 million. Moreover, the top line declined 29% year over year. The downside can primarily be attributed to the temporary shutdown of the company’s domestic and Macau casino operations. Moreover, travel restrictions also impacted the company’s performance in the quarter under review.
MGM China’s net revenues declined 63% year over year to $272 million, owing to the coronavirus pandemic. VIP Table Games Hold adjusted MGM China net revenues plunged 61% year over year to $275 million.
MGM China’s adjusted property EBITDAR (Earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs) loss came in at $22 million. In the prior-year quarter, the company had reported adjusted property EBITDAR of $193 million.
Domestic Operations
Net revenues at Las Vegas Strip Resorts during the first quarter were $1,133.8 million, down 21% year over year. Moreover, adjusted property EBITDAR declined 34% year over year and EBITDA margin contracted 466 bps compared with the prior-year quarter.
During quarter under review, net revenues from the company's regional operations amounted to $726 million, down 10% from the prior-year quarter. Adjusted property EBITDAR came in at $152 million, declining 28% from the year-ago quarter. However, adjusted property EBITDAR margin declined 544 bps to 20.9% year over year.
Casino revenues in the quarter under review fell 15% year over year at the company's Las Vegas Strip Resorts primarily due to dismal performance in the month of March, which offset an increase of 12% in casino revenues in first two months of the quarter. Moreover, slots handle declined 19%. Notably, slots handle decreased 8% at its Regional Operations.
Balance Sheet
MGM Resorts ended the first quarter with cash and cash equivalents of $6,016.4 million as of Mar 31, 2020 compared with $2,329.6 million on Dec 31, 2019. The company’s long-term debt at the end of quarter stands at $11,743 .3 million, compared with $11,168.9 million as of Dec 31, 2019.
In an effort to maintain sufficient liquidity, the company has cut dividend and decreased non-essential spending. It has also amended credit agreement and raised 750 million in new bonds.
Shares of Super League Gaming have gained 31% in the past month.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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MGM Resorts (MGM) Stock Down on Q1 Earnings & Revenues Miss
MGM Resorts International (MGM - Free Report) reported first-quarter 2020 results, wherein both earnings and revenues missed the Zacks Consensus Estimate. While the top line missed the consensus mark for the fourth consecutive quarter, the bottom line lagged the same for the second straight quarter. Following the results, the company’s shares declined 3.7% in after-hour trading session.
The company commenced the quarter on a strong note. However, closure of the company’s properties due to the coronavirus pandemic negatively impacted the results. The company announced it is too early to predict the opening dates of its domestic properties.
Earnings & Revenues Discussion
MGM Resorts reported adjusted loss per share of 45 cents, wider than the Zacks Consensus Estimate of a loss of 8 cents. In the prior-year quarter, the company had reported adjusted earnings per share of 14 cents.
Total revenues were $2,252.8 million, which missed the Zacks Consensus Estimate of $2,543 million. Moreover, the top line declined 29% year over year. The downside can primarily be attributed to the temporary shutdown of the company’s domestic and Macau casino operations. Moreover, travel restrictions also impacted the company’s performance in the quarter under review.
MGM Resorts International Price and EPS Surprise
MGM Resorts International price-eps-surprise | MGM Resorts International Quote
MGM China
MGM China’s net revenues declined 63% year over year to $272 million, owing to the coronavirus pandemic. VIP Table Games Hold adjusted MGM China net revenues plunged 61% year over year to $275 million.
MGM China’s adjusted property EBITDAR (Earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs) loss came in at $22 million. In the prior-year quarter, the company had reported adjusted property EBITDAR of $193 million.
Domestic Operations
Net revenues at Las Vegas Strip Resorts during the first quarter were $1,133.8 million, down 21% year over year. Moreover, adjusted property EBITDAR declined 34% year over year and EBITDA margin contracted 466 bps compared with the prior-year quarter.
During quarter under review, net revenues from the company's regional operations amounted to $726 million, down 10% from the prior-year quarter. Adjusted property EBITDAR came in at $152 million, declining 28% from the year-ago quarter. However, adjusted property EBITDAR margin declined 544 bps to 20.9% year over year.
Casino revenues in the quarter under review fell 15% year over year at the company's Las Vegas Strip Resorts primarily due to dismal performance in the month of March, which offset an increase of 12% in casino revenues in first two months of the quarter. Moreover, slots handle declined 19%. Notably, slots handle decreased 8% at its Regional Operations.
Balance Sheet
MGM Resorts ended the first quarter with cash and cash equivalents of $6,016.4 million as of Mar 31, 2020 compared with $2,329.6 million on Dec 31, 2019. The company’s long-term debt at the end of quarter stands at $11,743 .3 million, compared with $11,168.9 million as of Dec 31, 2019.
In an effort to maintain sufficient liquidity, the company has cut dividend and decreased non-essential spending. It has also amended credit agreement and raised 750 million in new bonds.
Zacks Rank & a Key Pick
MGM Resorts, which shares space with Las Vegas Sands Corp. (LVS - Free Report) and Wynn Resorts, Limited (WYNN - Free Report) , currently has a Zacks Rank #4 (Sell). A better-ranked stock in the same space includes Super League Gaming, Inc. that carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Super League Gaming have gained 31% in the past month.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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