Las Vegas, Nev.- Excluding a cash impairment charge of $0.34 per share from an investment in a convertible note, shares of MGM Grand (NYSE:MGM) lost $0.12 per share. That missed the $0.09 loss expectation the analysts following the company had predicted. |
MGM Mirage is engaged in gaming and resort operations. The company owns and operates casino resorts in Las Vegas which include Bellagio, MGM Grand, Mandalay Bay, The Mirage, Luxor, Excalibur, Treasure Island and Circus Circus, to name a few. I personally enjoy the Bellagio and Mandalay Bay but Excalibur needs to get imploded, especially if Louie Anderson is your headlining act.
Net revenue decreased 17% to $1.5 billion. Compared to the last quarter, casino revenue decreased 12% mainly as a result of lower table game volumes. On the plus side, baccarat volume went up 17% showing once and for all that old people are the only people who can still afford to gamble in Vegas. Other interesting reports include a 29% decrease in room revenue as well as a 29% drop in average room rates. Food and Beverage revenue dropped 13%, while corporate expenses rose $43 million, $13 million of which were from legal and advisory cost. No surprise that if anyone can steal from Vegas it going to be a lawyer.
Internationally, MGM is in talks with investors to develop a casino in Taiwan and potential projects in Japan and the Philippines.
“This has been a monumental quarter for us, as the significant capital market transactions and other corporate finance activities meaningfully improved our financial positions,” said Jim Murren, MGM Mirage Chairman and CEO. I guess if I lived in Vegas and someone gave me millions in credit, I would feel like I had a monumental quarter too. Never mind the unprecedented debt just put it on my tab!
MGM has clearly suffered from lower revenue, reduced net income, negative returns, lower visitor spending and reduced occupancy. I say take advantage of them and book as many weekend trip to Vegas as you can, while the rates are cheap!!