Casino operator MGM Mirage lost $212.6 million in the second quarter this year as it recorded hefty impairment charges and consumers gambled less during the recession. The results compared with profits of $113.1 million during the same period last year for the Las Vegas-based company, whose largest stockholder is billionaire investor Kirk Kerkorian. The company said Thursday that it lost 60 cents per share for the period ending June 30, compared with profit of 40 cents per share during the same period last year.
The latest quarter's results included 34 cents per share in impairment charges, and a loss of 11 cents per share related to $58 million in long-term debt retirement. MGM Mirage CEO Jim Murren told The Associated Press that the company's principal focus is on reducing its debt and keeping its existing resorts healthy. MGM Mirage said it had $12.3 billion in long-term debt as of June 30, $1.1 billion less than six months earlier. The company said it had $411 million in cash as of June 30.
Murren told investors during a conference call that the Las Vegas market is stabilizing for casino-resorts, with occupancy above 90 percent as tourists take advantage of lower room prices. "We will be a much stronger company on the other side of this recession," Murren said. Revenue fell 22 percent to $1.49 billion from $1.9 billion but still met Wall Street's estimate. Analysts forecast a loss of 9 cents per share on $1.49 billion in revenue.
Analyst Joseph Greff of JP Morgan Chase & Co. said MGM Mirage's $379 million in earnings before taxes, depreciation and amortization beat its expectations of $373 million. "Given low expectations heading into today and the beat, we'd expect stock to react strongly," Greff said. Shares of MGM Mirage rose 22 cents, or 3 percent, to $7.45 Monday.
Casino revenue for the quarter was $625.6 million, down 15.7 percent compared with $742.2 million during the second quarter last year. The company's food and beverage, entertainment and retail revenue also fell. The company said its revenue per available room — a key metric for hoteliers — fell 31 percent to $109 on the Las Vegas Strip.
Murren said MGM Mirage properties have seen more tourists compared with conventioneers as midweek business struggles. "Right now our mix is artificially skewed toward tourists," Murren said. "We need to get that mix back into balance." Murren said the company would likely be down about 400,000 room nights this year compared with last year in convention and meetings bookings. "It certainly is not going to be a quick recovery either for Las Vegas or for the market in general," Murren told the AP. "What's encouraging to us is the fact that it is recovering."
Murren said the company booked more future meetings in July than it did during the first two quarters combined, but he predicted that it would take two years before the segment will fully recover. MGM Mirage owns and operates 16 casinos in Nevada, Mississippi and Michigan. It also has 50 percent investments in four other properties. Company officials said they raised $75 million by selling two planes and land near the Las Vegas Strip.
MGM Mirage's current project is the $8.5 billion CityCenter complex on the Las Vegas Strip, a six-tower project to open in December between the Monte Carlo and Bellagio resorts with the Aria casino, hotels, condominiums and a retail mall. Bobby Baldwin, MGM Mirage's chief design and construction officer, said the property was on track, with 9,500 construction workers on site and work going on around the clock.
Baldwin said MGM Mirage had sold 1,336 of its condo units, with roughly 1,100 remaining. He also said CityCenter has 39 leases for retail tenants, including two stores owned by the complex itself. CityCenter projects that tenants will take in $1,300 in yearly revenue per square foot, company spokesman Alan Feldman said. Of that revenue, CityCenter expects to get about 10 percent in rent, he said.
Murren told investors that he disagreed with worries that CityCenter's 6,000-plus rooms will cannibalize business from other resorts on the Strip. "I think that's simplistic and wrong," Murren said. "We believe that CityCenter — particularly Aria — will grow the market in an extraordinary fashion," Murren said.
The latest quarter's results included 34 cents per share in impairment charges, and a loss of 11 cents per share related to $58 million in long-term debt retirement. MGM Mirage CEO Jim Murren told The Associated Press that the company's principal focus is on reducing its debt and keeping its existing resorts healthy. MGM Mirage said it had $12.3 billion in long-term debt as of June 30, $1.1 billion less than six months earlier. The company said it had $411 million in cash as of June 30.
Murren told investors during a conference call that the Las Vegas market is stabilizing for casino-resorts, with occupancy above 90 percent as tourists take advantage of lower room prices. "We will be a much stronger company on the other side of this recession," Murren said. Revenue fell 22 percent to $1.49 billion from $1.9 billion but still met Wall Street's estimate. Analysts forecast a loss of 9 cents per share on $1.49 billion in revenue.
Analyst Joseph Greff of JP Morgan Chase & Co. said MGM Mirage's $379 million in earnings before taxes, depreciation and amortization beat its expectations of $373 million. "Given low expectations heading into today and the beat, we'd expect stock to react strongly," Greff said. Shares of MGM Mirage rose 22 cents, or 3 percent, to $7.45 Monday.
Casino revenue for the quarter was $625.6 million, down 15.7 percent compared with $742.2 million during the second quarter last year. The company's food and beverage, entertainment and retail revenue also fell. The company said its revenue per available room — a key metric for hoteliers — fell 31 percent to $109 on the Las Vegas Strip.
Murren said MGM Mirage properties have seen more tourists compared with conventioneers as midweek business struggles. "Right now our mix is artificially skewed toward tourists," Murren said. "We need to get that mix back into balance." Murren said the company would likely be down about 400,000 room nights this year compared with last year in convention and meetings bookings. "It certainly is not going to be a quick recovery either for Las Vegas or for the market in general," Murren told the AP. "What's encouraging to us is the fact that it is recovering."
Murren said the company booked more future meetings in July than it did during the first two quarters combined, but he predicted that it would take two years before the segment will fully recover. MGM Mirage owns and operates 16 casinos in Nevada, Mississippi and Michigan. It also has 50 percent investments in four other properties. Company officials said they raised $75 million by selling two planes and land near the Las Vegas Strip.
MGM Mirage's current project is the $8.5 billion CityCenter complex on the Las Vegas Strip, a six-tower project to open in December between the Monte Carlo and Bellagio resorts with the Aria casino, hotels, condominiums and a retail mall. Bobby Baldwin, MGM Mirage's chief design and construction officer, said the property was on track, with 9,500 construction workers on site and work going on around the clock.
Baldwin said MGM Mirage had sold 1,336 of its condo units, with roughly 1,100 remaining. He also said CityCenter has 39 leases for retail tenants, including two stores owned by the complex itself. CityCenter projects that tenants will take in $1,300 in yearly revenue per square foot, company spokesman Alan Feldman said. Of that revenue, CityCenter expects to get about 10 percent in rent, he said.
Murren told investors that he disagreed with worries that CityCenter's 6,000-plus rooms will cannibalize business from other resorts on the Strip. "I think that's simplistic and wrong," Murren said. "We believe that CityCenter — particularly Aria — will grow the market in an extraordinary fashion," Murren said.
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