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Melco Resorts (MLCO) to Post Q1 Earnings: What's in the Cards?

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Melco Resorts & Entertainment Limited (MLCO - Free Report) is scheduled to report first-quarter 2020 results on May 14. In the last-reported quarter, the company reported a negative earnings surprise of 42.2%. 

How Are Estimates Placed?

The Zacks Consensus Estimate for first-quarter loss is pegged at 59 cents, indicating deterioration from earnings of 28 cents in the year-ago quarter. For quarterly revenues, the consensus mark is pegged at $631.6 million, suggesting a decline of 53.6% from the year-earlier figure.

Let's take a look at how things have shaped up in the quarter.

Melco Resorts Entertainment Limited Price and EPS Surprise

 

Factors at Play

The coronavirus pandemic is expected to have materially affected Melco Resorts’ performance in the first quarter. Temporary shutdown of casino operations is likely to get reflected on top-line results. Also, soft performance of the rolling chip and mass market table games segments is expected to show on results.

Rise in construction and investment-related costs is likely to have weighed on margins in the quarter. Cash burn due to the closure of properties is likely to have affected the bottom line. 

Nonetheless, constant upgrade of mass gaming segments along with expansion initiatives is likely to have boosted the top line in the first quarter. Moreover, a geographically-diversified regional gaming platform is expected to have contributed.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Melco Resorts this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. That is not the case here.

Earnings ESP: Melco Resorts has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Peer Releases

Boyd Gaming Corporation (BYD - Free Report) reported preliminary first-quarter 2020 results, wherein the top and the bottom line missed the Zacks Consensus Estimate. Adjusted loss per share came in at 2 cents. The figure lagged the Zacks Consensus Estimate for earnings of 23 cents. In the prior-year quarter, the company reported adjusted earnings of 43 cents per share. Quarterly revenues of $680.5 million missed the consensus mark by 12.1% and declined 47.7% year over year.

MGM Resorts International (MGM - Free Report) reported first-quarter 2020 results, wherein earnings and revenues missed the Zacks Consensus Estimate. The company 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 reported adjusted earnings per share of 14 cents. Quarterly revenues of $2,252.8 million missed the consensus mark by 11.4% and declined 29% year over year as well.

Wynn Resorts, Limited (WYNN - Free Report) reported first-quarter 2020 results, wherein earnings and revenues missed the Zacks Consensus Estimate for the third straight quarter. The company reported an adjusted loss of $3.54 per share, wider than the Zacks Consensus Estimate of a loss of $1.05. In the prior-year quarter, the company reported adjusted earnings per share of $1.61. Further, quarterly revenues of $953.7 million lagged the consensus mark by 12.7% and declined 42.3% year over year as well.

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