MGM International (MGM) slid 6% in midday trading after falling as much as 9.9% earlier in the day, following a mixed earnings report.
MGM lost 25 cents per share in the quarter on $2.23 billion in revenue. Analysts had been expecting a 14-cent loss on $2.22 billion in revenue. On an EBITDA basis, MGM reported $444 million versus expectations for $451 million. Revenue per available room on the Las Vegas strip rose 13%. the company sees total RevPAR rising 10% in the current quarter.
The company appears to have been relatively unlucky at the table games, one analyst noted.
“The miss vs. our estimate was primarily from Las Vegas, where EBITDA was $10M lower than we projected,” writes FBR Capital Markets analyst C. Patrick Scholes. “Management noted the overall table games hold percentage at its domestic resorts in 3Q was near the low-end of the normal range of 19-23%. However, they did not quantify the EBITDA difference between the 3Q result and what it would have been with a more normal hold percentage.”
Investors may be concerned about the company’s expansion plans in Macau, which could pressure margins going forward. MGM is building a new resort on the Cotai strip in Macau, which could open in 2014.
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