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It has been about a month since the last earnings report for MGM Resorts (MGM). Shares have added about 0.3% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is MGM due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
MGM Resorts Q2 Earnings & Revenues Surpass Estimates
MGM Resorts reported impressive second-quarter 2024 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis.
During the quarter, the company exhibited strong financial performance and growth, setting a record for MGM China Adjusted Property EBITDAR. Also, it stated the benefits of Las Vegas expansion and strategic partnership with Marriott. MGM’s meetings and convention business witnessed improvement, supported by the remodel of Mandalay Bay.
In terms of international digital strategy, the company reported significant advancements, including an in-house sports product and live dealer capabilities for online gaming offerings. Given the strategic initiatives and significant progress, management is optimistic and anticipates the momentum to continue for the remainder of 2024.
Earnings & Revenue Discussion
MGM Resorts reported earnings per share (EPS) of 86 cents, outpacing the Zacks Consensus Estimate of 66 cents. In the prior-year quarter, it incurred an adjusted EPS of 59 cents.
Total revenues were $4.33 billion, surpassing the Zacks Consensus Estimate of $4.18 billion by 3.6%. The top line increased 9.8% year over year on the back of strong contributions from MGM China.
MGM China
During the second quarter, MGM China's net revenues surged 37% year over year to $1.02 billion. The upside can be attributed to the ramp-up of operations following the removal of COVID-19-related travel and entry restrictions in the first quarter of 2023. MGM China casino revenues were up 33% year over year to $891 million.
MGM China's adjusted property earnings before interest, taxes, depreciation, amortization and restructuring or rent costs (EBITDAR) amounted to $294 million compared with 209 million reported in the prior-year quarter.
Domestic Operations
Net revenues at Las Vegas Strip Resorts were $2.2 billion, up 2.7% year over year. The upside was primarily driven by a rise in rooms, catering and banquets revenues.
Adjusted property EBITDAR increased 1% year over year to $782 million. Casino revenues were $485 million, down 2% year over year.
Net revenues from Regional operations totaled $927 million, almost flat year over year. Adjusted property EBITDAR was $288 million, down 2% from $294 reported in the prior year quarter.