MGM Resorts International said its first-quarter revenue fell
11% as the casino operator's weaker performance in Macau was partly
offset by continuing growth in the Las Vegas market.
Shares fell 3% to $20.75 in recent premarket trading.
MGM had relied more on robust revenue growth from its Macau
operations to bolster results in recent years while enjoying
increased traffic at its Las Vegas hotels and casinos. However,
like other big casino operators, MGM has seen a corruption
crackdown and weakening economy on the mainland cut into business
in Macau, the only place in China where casinos are legal.
In the latest quarter, MGM China's revenue fell by a third to
$630.1 million, as VIP table games revenue slumped 45% on a 51%
slide in turnover. Main floor table games posted a 13% decrease in
revenue.
MGM has come under pressure from activist investor Land &
Buildings, which wants the casino giant to tap the improving Las
Vegas economy by creating a real-estate investments trust with a
separate publicly traded company to manage its Las Vegas Strip
resorts, as well as spin off its MGM China business. The activist
investor is seeking seats on MGM's board.
"With the anticipated difficult comparison of the first quarter
behind us, we continue to see strong forward trends for the rest of
the year in Las Vegas," Chairman and Chief Executive Jim Murren
said in a news release Monday.
Overall, MGM reported a profit of $169.9 million, or 33 cents a
share, up from $102.7 million, or 20 cents a share, a year earlier.
The latest period included a tax benefit of $56.3 million. Revenue
decreased 11% to $2.33 billion.
Analysts polled by Thomson Reuters expected per-share profit of
13 cents and revenue of $2.4 billion.
At MGM's wholly owned domestic resorts, which include properties
on the Las Vegas Strip and others throughout the U.S., revenue
edged up 0.5% to $1.58 billion.
Revenue per available room, a key measure of performance for the
lodging industry, grew nearly 1% at the company's Las Vegas Strip
resorts. Though occupancy decreased to 90% from 92% a year earlier,
the average daily rate for the Las Vegas Strip resorts improved
3.4%.
The latest quarter also included improved results at MGM's
CityCenter joint venture, where MGM's share of the venture's income
surged to $101.6 million from $14 million with a boost from a $160
million gain related to a settlement of disputes with
contractors.
MGM last month unveiled a special dividend of $400 million from
its CityCenter joint venture that will be split between the casino
operator and Dubai World, its partner on the Las Vegas complex.
City Center had been marketed during the height of the real
estate boom before the recession hit as a lively mixed-use new
urban center. But the number of condos was scaled back as the
economy cooled and because one of the towers was halted by
construction defects.
Write to Tess Stynes at tess.stynes@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires