MGM Resorts Previews 3Q – Analyst Blog

Las Vegas-based MGM Resorts International (MGM) announced preliminary results for third quarter 2010 on Tuesday. The company is slated to report its third quarter figures on November 5.

 

On a reported basis, the company expects third quarter diluted loss per share of approximately 72 cents compared with a loss of $1.70 per share in the prior-year period. Net revenue is expected to be $1.56 billion. Excluding reimbursed costs revenue mainly related to the company’s management of CityCenter, net revenue is expected to be $1.47 billion. CityCenter expects to generate net revenue of $413 million.

 

RevPAR in Las Vegas Strip is estimated to be $97 for the third quarter, a decrease of 2% year over year, with occupancy of 93% and an average daily rate of $105 while Bellagio and Mandalay Bay both recorded a rise in RevPAR in the third quarter. The company expects total casino revenue to decrease 9% year over year with slot revenue falling approximately 3%.

 

Operating loss for the third quarter of 2010 is expected to be approximately $206 million including the CityCenter investment impairment, the Borgata impairment and the company’s share of the CityCenter residential impairment charge. In the comparable quarter last year, operating loss was $963 million.

 

MGM Resorts anticipates a loss of $7 million from unconsolidated affiliates in the third quarter compared with a loss of $133 million in the prior year period. MGM Macau is expected to post operating income of $61 million, up from $50 million in third quarter 2009.

 

On a separate note, MGM Resorts commented that it has received an offer of more than $250 million for its 50% economic interest in Borgata Hotel Casino & Spa in Atlantic City. MGM submitted the offer to Boyd Gaming Corp. (BYD), which owns the other 50% and has the right to consider the offer.

 

MGM Resorts further said it is offering 40.9 million shares of its common stock, while its largest stockholder, Tracinda Corp., is offering 27.8 million shares of its common stock. The proceeds will be used to pursue general corporate purposes, including repaying debt. MGM Resorts currently retains the Zacks #3 Rank, which translates into a short-term Hold rating.