Higher Costs deepens fourth Quarter losses for MGM Resorts
Even though the Company witnessed a surge in its revenue, MGM Resorts (NYSE: MGM), operator of the Bellagio and CityCenter, suffered bigger than expected fourth quarter losses due to rising costs.
For the last quarter, MGM posted a net loss of $113.7 million, or 23 cents a share, compared to previous fourth quarter net loss of $139.2 million, or 29 cents a share.
According to Thomson Reuters I/B/E/S , MGM lost 21 cents a share, compared with analysts’ estimates of a loss of 19 cents, excluding special items.
Meanwhile, the consolidated net revenue in the fourth quarter soared 55 percent to $2.3 billion surpassing analysts’ estimates of $2.22 billion. However, the Company’s expenses which rose 57 percent to $2.2 billion spoiled the net profit.
According to David Bain, analysts at Sterne, Agee & Leach, while speaking with Reuters commented that “costs were higher than expected and it remains to be seen how much of the costs were one-time and how much will be rolled on”
Meanwhile commenting on the results, Patrick Scholes, analyst at FBR Capital Markets, in a note to its clients said that “We suspect the miss versus consensus is from higher-than-anticipated corporate expenses,”
Earlier this month, MGM’s competitor Las Vegas Sands Corp (NYSE: LVS) posted an in-line profit as strong revenue from Asia was partly spoiled by higher expenses.
At present, MGM is spending more in Macau to compete with larger rivals Sands and Wynn Resorts Ltd (NASDAQ: WYNN).
Shares of the company had lost 1 percent, trading at $14.01 late morning on Wednesday on the New York Stock Exchange. The stock had almost doubled in value until Tuesday since touching a year low in October last year.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht. |
