Replies to post #1127 on MGM Resorts International (MGM)

[eastunder]

MGM Mirage loss wider than expected; stock slumps

Thu Feb 18, 2010 11:15am

MGM Mirage

http://www.reuters.com/article/idCNN1818219420100218?rpc=44

* Q4 EPS ex-items loss 21 cts vs Street view loss 13 cts

* Q4 revenue off 11 pct

* Shares fall 6 percent

(Adds Las Vegas Sands reference, analyst comment, updates share price)

By Deena Beasley

LOS ANGELES, Feb 18 (Reuters) - MGM Mirage (MGM.N), which opened the massive CityCenter project on the Las Vegas Strip in December, posted a wider-than-expected fourth-quarter loss on Thursday and analysts said the casino and hotel owner cut prices to boost occupancy rates.

MGM, whose shares fell 6 percent in early trading, posted a loss of 21 cents a share before one-time items, much worse than analysts' average forecast of a loss of 13 cents, according to Thomson Reuters I/B/E/S.

"We have continued concerns -- not so much on occupancy rates but more so on (hotel room) pricing," said Sterne, Agee & Leach analyst David Bain. "We don't see any change in pricing in the near term."

The debut of CityCenter, which added some 6,000 luxury hotel rooms to the Strip, has raised concerns that operators will need to discount prices further to attract recession-battered tourists and conventioneers.

"It is an incredibly competitive market and we believe that companies such as MGM are buying (market) share," Bain said.

Analysts also said profit margins at MGM were worse than expected as the company exhausted cost-cutting measures.

"MGM is sacrificing margins in order to keep their properties filled," Stifel Nicolaus analyst Steven Wieczynski said in a research note.

The company's Las Vegas Strip revenue per available room (revPAR) -- a combination of room occupancy and rate -- fell 16 percent in the fourth quarter.

The number has dropped 38 percent over the past two years, according to Goldman Sachs.

Executives at rival Las Vegas Sands Corp (LVS.N), which reported late on Wednesday quarterly results that disappointed some investors, said on a conference call with investors and analysts that Strip revPAR will likely drop again this year as operators compete for group business.

The casino operator, which is seeking to amend a $5.5 billion credit facility, reported a quarterly net loss of $433.9 million, or 98 cents per share, compared with a year-earlier net loss of $1.15 billion, or $4.15 per share.

MGM said its casino revenue fell 7 percent.

The latest results included a pretax noncash impairment charge of 73 cents a share tied to undeveloped land holdings in Atlantic City, New Jersey.

Overall revenue, adjusted for promotional allowances, fell 11 percent to $1.45 billion, roughly in line with analysts' forecasts.

MGM's holdings also include gambling resorts in Mississippi and Michigan, and joint ventures in New Jersey and China's Macau.

The company said earlier this month it planned to sell its 50 percent ownership of the Borgata resort in Atlantic City after New Jersey regulators raised questions about the suitability of Pansy Ho, MGM's joint venture partner in Macau, where the company plans to conduct an initial public offering later this year.

Shares of MGM were down 73 cents, or 6 percent, at $10.90 in morning trading on the New York Stock Exchange. Shares of Las Vegas Sands were down $1.44, or 8 percent, at $16.02. (Reporting by Deena Beasley; Additional reporting by Karen Jacobs in Atlanta; editing by John Wallace)

[eastunder]

I can't believe they can put something like that in print and not be looked at as manipulating a stock.

"Message boards are heating up with investors predicting MGM will file for bankruptcy before the end of the year."

Really? Geesh what a bunch of ....

"During the quarter, the casino operator lost $433.9 million, or 98 cents a share, compared with a loss of $1.15 billion, or $4.15 a share in the year-ago period.

Excluding an impairment charge to write down the value of undeveloped Atlantic City land and other items, it lost 21 cents per share."


I actually find the above a positive.

[eastunder]

Will MGM Mirage File for Bankruptcy in 2010?
Jeanine Poggi

02/22/10 - 08:00 AM EST

NEW YORK (TheStreet) -- MGM Mirage(MGM Quote) has been the subject of bankruptcy talks for years -- but each time MGM nears the brink of Chapter 11, it has always found a way to put a band-aid on the wound.

Now as MGM reports yet another disappointing quarter, the debate begins anew: Can MGM continue to avoid bankruptcy or is a Chapter 11 filing pending?

The casino operator announced on Thursday that it had narrowed its loss in the fourth quarter, but the loss for MGM was still greater than Wall Street's expectations.

During the quarter, MGM lost $433.9 million, or 98 cents a share, compared with a loss of $1.15 billion, or $4.15 a share, in the year-ago period.

Excluding an impairment charge to write down the value of undeveloped Atlantic City land and other items, MGM lost 21 cents per share. Revenue dropped 11% to $1.45 billion from $1.62 billion last year.

In response, chatter began surfacing on message boards last week that MGM would file bankruptcy before the end of the year.

MGM has significant exposure to the Las Vegas strip, which analysts believe won't see a turnaround in the near future. And despite management's upbeat view on the stabilization in group booking and visitation rates, Sterne Agee analyst David Bain says the trend is nothing to get excited about as pricing remains weak.

"MGM won't work its way through this situation by just cutting costs and earnings power, regardless of a rebound on the strip," says Alex Calderone, who provides turnaround and crisis management services for the gaming sector at Conway MacKenzie. Both Calderone and Bain say bankruptcy could be an alternative for MGM, but that it may be premature to discuss, as MGM has the backing of its bankers and many valuable assets under its belt.

Instead, Calderone says MGM will look to extend maturities, modify ammortization schedules or conduct debt exchanges. As a last resort, it may even sell some of its assets.

So what do you think: Are there enough options to keep MGM Mirage out of bankruptcy court ... or has its time run out? Vote in poll below to learn the consensus of TheStreet -- or leave a comment below to persuade the world of the inherent rightness of your opinion.

Take poll here:

http://www.thestreet.com/_yahoo/story/10685200/1/will-mgm-mirage-file-for-bankruptcy-in-2010.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA