MGM Resorts, the casino company behind such Las Vegas Strip properties as the MGM Grand, Bellagio and Aria, reported its first-quarter earnings today.
Company: MGM Resorts International (NYSE: MGM)
Revenue: $2.21 billion, down 5.3 percent from the first quarter of 2015.
Earnings: $66.8 million, compared to $169.9 million during the same time period a year ago.
Earnings per share: 12 cents, compared to 33 cents per share in the first quarter a year earlier.
What it means: Revenue at the company’s United States resorts grew 3 percent compared to 2015, excluding its jointly owned properties. But revenue from MGM Resorts’ China division fell 26 percent, reflecting ongoing struggles in that market, which has seen 23 straight months of year-over-year gambling revenue declines.
MGM Resorts’ earnings this quarter were negatively affected because it had a $56.3 million tax benefit last year but a $21.3 million tax provision this year, which a company statement said came “primarily as a result of a decrease in the amount of foreign tax credits that we expect to benefit in 2016.”
And the first quarter of 2015 benefitted from a 9 cent per share gain tied to resolution of construction litigation and remaining settlements at CityCenter, the statement said.
MGM Resorts also noted that its corporate expense of $71 million in the first quarter this year marked an increase of $21 million from the same time period in 2015.
That was due in part to the fact that this year’s quarter included $7 million in costs related to the company’s profit growth plan and another $7 million related to MGM Growth Properties LLC, the new real estate subsidiary that recently completed its initial public offering.
CEO Jim Murren said on a conference call with analysts that his company “certainly got the right price” when it sold the Crystals mall at CityCenter for $1.1 billion, a transaction that allowed MGM Resorts to receive $540 million in dividends. Because of that and the MGM Growth Properties transaction, Murren said his company had “improved our balance sheet profoundly.”
MGM Resorts is also in the midst of implementing so-called profit growth plan that’s expected to eventually produce an extra $300 million annually in adjusted earnings before interest, taxes, depreciation and amortization. Murren said the results had already “far exceeded our initial expectations.”
“We challenged ourselves to really redefine, literally, how we operate every aspect of our business,” he said.
Murren also said that MGM Resorts’ new T-Mobile Arena hosted more than 100,000 guests since it debuted in early April.
Outside Las Vegas, the company continues to progress with its plans to open the MGM National Harbor resort outside Washington, D.C., in December.