MGM Resorts 4Q loss narrows as expenses decline

MGM Resorts International’s fourth-quarter loss narrowed, helped by reduced expenses.
The casino operator owns and runs properties in Nevada, Mississippi and Michigan, including 10 casinos on the Las Vegas Strip. It also has a 51 percent holding in a Chinese gambling enclave in Macau.
“Las Vegas is truly recovering, MGM China continues to grow, our balance sheet has improved dramatically and we are working toward the several exciting projects which we believe will accrue to the value and benefit of our shareholders,” CEO Jim Murren said during a conference call with analysts and investors Wednesday.
MGM is working on expanding into several new U.S. markets, including Maryland and Massachusetts. The company is also building a $350 million sports arena on Strip in partnership with sports and entertainment promoter AEG. The arena is expected to open in spring of 2016 between the New York-New York and Monte Carlo hotel-casinos.
CFO Daniel D’Arrigo hinted that MGM might have more Las Vegas projects in the works, though he said the company doesn’t want to add additional rooms on the Strip, where inventory is already thought to be too high. He suggested MGM might work with other companies to capitalize on property it already owns by attracting more events.
MGM lost $38.3 million, or 8 cents per share, for the period ended Dec. 31, 2013. That compares with a loss of $1.22 billion, or $2.50 per share, a year ago. Analysts, whose estimates typically exclude one-time items, predicted a loss of a penny per share.
Expenses declined to $2.2 billion from $2.72 billion.
Revenue rose 10 percent to $2.51 billion from $2.29 billion, driven by gains in the casino arena as well as rooms, entertainment and food and beverages. Wall Street forecast revenue of $2.47 billion.
At wholly owned domestic hotel-casinos, revenue per available room improved to $114 from $112. This figure is a key gauge of a lodging company’s health. The average daily rate increased to $133 from $130, while occupancy declined by one percentage point to 85.
MGM China reported a 27 percent rise in revenue during the quarter. The subsidiary announced a $500 million special dividend on Wednesday, which will be paid on March 17. MGM Resorts will receive $255 million, which is its share of the special dividend.
For the year, MGM Resorts lost $156.6 million, or 32 cents per share, versus a loss of $1.77 billion, or $3.62 per share, in 2012.
Annual revenue climbed 7 percent to $9.81 billion from $9.16 billion.
The Las Vegas company’s stock rose 41 cents, or 1.6 percent, to $26.25 in midday trading. Its shares have doubled over the past year.

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