MGM misses 4Q profit forecasts, shows effects of shooting
LAS VEGAS (AP) — MGM Resorts International on Tuesday reported fourth-quarter net income of $1.4 billion, which came almost entirely from its massive one-time windfall from the nation’s new tax law.
The company also provided a clear picture of how the mass shooting at the Mandalay Bay casino-resort last fall affected its operations.
The Las Vegas-based company said it had a profit of $2.42 per share. Its earnings excluding the big tax windfall passed late last year amounted to less than a penny per share. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of 7 cents per share.
The casino and resort operator posted revenue of $2.6 billion in the period, exceeding Wall Street forecasts. Five analysts surveyed by Zacks expected $2.5 billion.
“Despite the clear challenges we had in the fourth quarter, our earnings were relatively well-protected, and we finished the year strong,” MGM Chairman and CEO Jim Murren told investors. “This is the second time we talk to you since we experienced the great shock to our community in October, and yet our fourth quarter materialized as we expected as we discussed in our last call. In fact, it was a touch better.”
The reporting period started on Oct. 1, the same day a high-stakes gambler killed 58 people and injured hundreds more after he shattered the windows of his suite on the 32nd floor of the Mandalay Bay and unleashed gunfire on a country music festival below. He then killed himself.
The company on Tuesday said it experienced a “short-lived uptick in cancellations” following the shooting. The company reported Mandalay Bay’s occupancy rate was 80.5 percent during the reporting period, down from 85.8 percent during the same quarter in 2016.
Mandalay Bay’s net revenue fell $13.5 million to $185.6 million during the reporting period. Adjusted property earnings fell 20 percent to $28 million compared to the same quarter in 2016.
The company’s Luxor and Excalibur casino-resorts also saw revenue declines during the quarter.
“I’m incredibly proud of the people here at MGM, particularly after the events of 1 October,” Murren said. “We quickly scaled our business, put our analytical and operational horsepower to work and made strong guidance about what we thought we would do in an uncertain time, and we delivered on that guidance.”
The company said Mandalay Bay continues to recover toward normalcy.
MGM shares have climbed 3 percent since the beginning of the year. The stock has climbed 30 percent in the last 12 months.
Portions of this story were generated by Automated Insights (http://automatedinsights.com/ap ) using data from Zacks Investment Research. Access a Zacks stock report on MGM at https://www.zacks.com/ap/MGM