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Casinos & Hotels

Fewer High Rollers Costs MGM Resorts

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By Paul Ausick Published
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Shares of MGM Resorts International (NYSE: MGM) dropped this morning after the company reported a larger-than-expected loss in the third quarter. The company posted an earnings per share (EPS) loss of $0.37, compared with a consensus estimate of loss of $0.17 and a loss of $0.14 in the third quarter of 2013.

Revenues rose 1% to $2.3 billion on the strength of MGM’s Macau casino. Yesterday Ceasars Entertainment Corp. (NASDAQ: CZR) said that it would abandon its plans for a Macau casino after trying for five years to get permission to build on a property it had paid $578 million for. Wynn Resorts Ltd. (NASDAQ: WYNN) reported lower revenues in Macau on its third-quarter, although the company was able to boost its Las Vegas revenues to make up the difference.

Like Wynn, MGM said its VIP table-games revenue fell in Macau. MGM’s turnover fell 5% year-over-year and Wynn’s fell 12.1%. The drop is certainly due to new restrictions enacted by the mainland Chinese government earlier this year that limits both visas to travel to Macau and the amount of credit available to gamblers.

MGM’s shares are down about 4% today, at $10.16 in a 52-week range of $8.83 to $14.94. Shares of Ceasars are down 1.2% at $5.78, after posting a new 52-week low of $5.69 earlier today. The prior range was $5.80 to $17.90.

Paul Ausick

Contact [email protected] for any questions or corrections.

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About the Author Paul Ausick →

Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.

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