MGM Resorts 1Q profit leaps on Macau strength
LAS VEGAS (AP) — MGM Resorts International’s first-quarter net income soared, bolstered by continued strength in Macau and improved room bookings on the Las Vegas Strip.
Chairman and CEO Jim Murren said in a statement that MGM Resorts is increasing U.S. convention business at its properties in the middle of the week and hosting a strong slate of events on weekends. Company officials said a $66 million expansion of the Mandalay Bay convention center announced last week is expected to help it attract larger events and capture more of the recovering meeting business.
MGM is breaking ground Thursday on a $350 million arena on the Strip, and revealed details this week about “The Park,” an eight-acre, tree-lined outdoor entertainment and dining district in front of the venue. Murren said those projects, combined with new developments citywide and airport improvements, will help push Las Vegas’ annual visitation number up from 40 million to possibly 50 million in a few years.
At CityCenter — the massive development in Las Vegas that is owned jointly with Dubai World — revenue from resort operations edged up 2 percent to $313 million.
MGM China — which runs the MGM Macau casino-resort and is developing a new Cotai resort — reported that revenue rose 26 percent. Macau is the only place in China where gambling is legal. MGM Cotai is on pace to open in early 2016, and will have three times as many hotel rooms as the existing MGM Macau casino.
For the period ended March 31, the casino operator earned $108.2 million, or 21 cents per share. A year earlier it earned $6.5 million, or 1 cent per share.
The current quarter included a $3.5 million income tax benefit. The prior-year period reflected a $30.4 million income tax provision.
Analysts polled by FactSet expected earnings of 8 cents per share for the Las Vegas company.
Revenue climbed 12 percent to $2.63 billion from $2.35 billion, topping Wall Street’s average estimate $2.57 billion.
Occupancy improved on the Las Vegas Strip to 92 percent from 90 percent. The average daily rate for rooms rose to $147 from $132. And revenue per available room, a key lodging industry metric, increased to $135 from $118.
Food and beverage revenue on the Las Vegas Strip climbed 6 percent on more convention and banquet business and the opening of some new retail outlets.
MGM Resorts’ stock rose $1.80, or 7.8 percent, to $24.82 in afternoon trading Tuesday. They are up 80 percent from a year ago.
The first quarter was also a boon for rival Las Vegas Sands, which reported last week that its net income rose 36 percent due to a strong performance in Macau.
AP Business Writer Michelle Chapman reported from New York.