UPDATE: MGM Swings To 2Q Loss; Las Vegas Strip Revpar Down 31%
04 8월 2009 - 12:14AM
Dow Jones News
MGM Mirage (MGM) swung to a second-quarter loss amid charges and
falling revenue as the casino giant said that, while demand is
still low, signs of a pickup in bookings are afoot.
The results offered few surprises and were largely in line with
expectations. They also follow relatively mixed performances by the
other major casino operators this earnings season. In wake of the
report, MGM Mirage's shares declined 3% to $7.45 in recent
trading.
MGM Mirage, which has a large presence on the Las Vegas Strip,
posted a loss of $212.6 million, or 60 cents a share, compared with
year-earlier income of $113.1 million, or 40 cents a share. The
latest results included a net 45 cents in write-downs related to
MGM's investments in a convertible note and the redemption of
senior debt to permit its recent note issuances.
Revenue decreased 20% to $1.66 billion.
Analysts surveyed by Thomson Reuters expected a 9-cent loss on
revenue of $1.49 billion.
Chairman and Chief Executive Jim Murren on Monday called it a
"monumental quarter," citing recent capital-markets deals and
saying the company saw a more stabilized, though still tough,
operating environment.
Casinos, especially those in tourist destinations such as Las
Vegas and Atlantic City, continue to suffer from a sharp drop in
revenue and visitors due to rising unemployment and steep declines
in consumer spending. MGM Mirage recently executed more than $2
billion in stock and bond offerings to help whittle down its hefty
debt load, while removing a bankruptcy threat.
As of June 30, MGM Mirage had about $4.1 billion of borrowings
outstanding under its credit facility and its cash balance was
about $411 million.
Union Gaming Group noted in a report that MGM Mirage beat
estimates for earnings before interest, taxes, depreciation and
amortization, "marking the second consecutive quarter of sequential
property Ebitda improvement."
"To a degree management's cost initiatives have mitigated
negative operating leverage for the last two quarters and
underscore material positive operating leverage with any positive
inflection in operating results. To that end, 2Q results
demonstrate some signs of stabilization," Union Gaming said.
MGM Mirage, which has 16 casinos and 50% stakes in four others,
said casino revenue fell 12%. Room revenue dropped 29%, continuing
to be hurt by weakness in convention bookings and business travel,
while revenue from food and beverage declined 13%.
MGM Mirage said occupancy at its Las Vegas Strip resorts slid to
94% from 97%. The locale's revenue per available room, a
lodging-industry benchmark, fell 31%. Murren said the company has
seen some signs of improvement in future bookings.
-By A.D. Pruitt, Dow Jones Newswires; 212-416-2197;
angela.pruitt@dowjones.com
(Kerry Grace Benn contributed to this report.)