MGM Resorts International, the casino company that operates such Strip properties as the Bellagio, MGM Grand and Aria, reported its fourth-quarter and full-year earnings today.
Company: MGM Resorts International (NYSE: MGM)
Revenue: $2.38 billion for the fourth quarter, down 5.1 percent from the same quarter in 2013. The company’s United States properties performed well, but net revenue in China dropped significantly. For the 2014 calendar year, MGM’s net revenue was $10.1 billion, up 3 percent from 2013.
Loss: $342.3 million for the fourth quarter, compared with a net loss of $56.8 million in the same quarter of the year before. The company cited an income tax provision as one factor behind the unfavorable year-over-year comparison. For the full year, MGM’s net loss was $149.9 million, compared with a net loss of $171.7 million in 2013.
Loss per share: 70 cents for the quarter, compared to 12 cents in 2013. For the full year, the company’s loss per share was 31 cents, compared with 35 cents the year before.
What it means: As with other casino companies that operate in Macau, MGM felt the effects of tough market conditions there in the fourth quarter. MGM China, which runs the MGM Macau casino, reported net revenue of $719 million for the fourth quarter, down 22 percent from 2013. A government-led crackdown on corruption has contributed to eight consecutive months of gaming revenue declines in Macau.
Nonetheless, MGM is still pressing forward with plans to open another casino in Macau — the MGM Cotai.
CEO Jim Murren told analysts on a conference call this morning that construction is progressing well and the project is on track to open in fall 2016.
Revenue at MGM’s wholly owned United States resorts was $1.55 billion for the quarter, compared to $1.48 billion in 2013. Casino revenue increased 5 percent, which MGM attributed to better table games volume and hold percentage. Meanwhile, room revenue and food and beverage revenue both increased 6 percent, the company said.
The company is expanding domestically, too.
In Las Vegas, MGM is working (in conjunction with others) on an arena project between its New York-New York and Monte Carlo casino-hotels as well as an outdoor music festival area across from SLS Las Vegas.
The arena should open next spring, and the festival grounds will be open in time to host Rock in Rio in May.
If an effort to bring a hockey team to Las Vegas is successful, MGM’s arena could host the team.
In an interview after the conference call, Murren said that as a joint owner of the arena, MGM is “agnostic” about hosting a hockey team there because the arena doesn’t need it to be successful. MGM, however, would welcome a hockey team because it would bring more locals to the company’s businesses in the area.
And from a personal perspective, Murren is even more enthusiastic about the prospect of a hockey team.
“From somebody that lives in Las Vegas with two teenage sons, I am wildly in support of a hockey team,” he said. “I would be bitterly disappointed if we didn’t get it.”
Beyond Las Vegas, MGM is also building casinos in Springfield, Mass., and in Maryland near Washington, D.C.