MGM said it expects a 22-cent first-quarter loss, swinging from a 38-cent profit a year earlier, though both contained one-time items.
Excluding a large gain from extinguishing debt and a smaller impairment charge, the loss would have been 31 cents a share. Analysts, who typically exclude one-time items from their view, were expecting a 21-cent loss, according to a survey by Thomson Reuters.
The company also said revenue would likely be $1.46 billion, above the average analyst estimate for $1.43 billion. The first-quarter projection represents another year-on-year sales slide. Total casino revenue is expected to be approximately 5% lower than the prior year, an improvement from the fourth quarter's 11% drop.
MGM said that its revenue-per-available-room, a key lodging metric, on the Las Vegas Strip fell 8% from a year earlier, with occupancy of 85%. The tourist haven has struggled in the recession as gamblers either quit to save money or placed their bets at casinos closer to home, while corporations are avoiding taking business trips to such a flashy locale.
So MGM Mirage's early results look mixed compared to Wall Street expectations, but Wall Street is looking fairly negatively so far. MGM stock closed about 5.6% lower in after hours trading (though off its lows from about two hours ago), which means it will likely open much lower when the New York Stock Exchange (NYSE) reopens for trading tomorrow morning. What's all the commotion about?
As the analysts were saying on that CNBC clip I posted above, there's still concern over consumer spending... And apparently rightfully so, considering MGM's Las Vegas Strip REVPAR (revenue per available room) slid 8% to $94. However MGM's average room rates actually rose to $111 per night while occupancy remained stable at 85%, which was especially quite the feat considering Aria being a drag at only 63% occupancy.
And that's just it, CityCenter's first earnings report was a dud. MGM Mirage is expecting to report a $255 million operating loss on CityCenter in Q1 2010. However, it is still quite young and MGM is still expecting better results later in the year as summer tourist season approaches. And with overall Vegas tourism and gaming numbers improving in late 2009 and continuing this trend so far in 2010, there's certainly reason to hope.
So what should we take out of the early MGM Mirage numbers? It's still looking tough out here in Vegas, but things aren't looking so scary any more. And hopefully when the Las Vegas Sands, Harrah's Entertainment, and Wynn Resorts numbers come out, we'll get an even better picture of the overall financial health of The Strip.