NEW YORK – Casino operator MGM Mirage (MGG), which plans to buy Mandalay Resort Group (MBG), reported better-than-expected results Tuesday, driven by a boom in its Las Vegas businesses.
The owner of the Bellagio (search) and MGM Grand casinos said net income fell to $67.9 million, or 47 cents a share, from $91.7 million, or 62 cents a share, a year earlier, when it posted a land sale gain.
Excluding one-time items the company earned 51 cents a share, beating the average analyst estimate of 44 cents a share, as compiled by Reuters Estimates. The company's shares rose more than expected.
MGM Mirage shares, which two weeks ago rose to their highest level in fifteen years, rose 79 cents to $72.60, on the New York Stock Exchange (search).
"You can expect to see the strength in Las Vegas demand continue into the first quarter, and that will be a positive for the stock throughout the day," Falcone said.
Looking ahead, MGM said the Wall Street first-quarter earnings estimate of 74 cents was "reasonable." It forecast revenue per room growth of 10 percent in the first quarter, driven by conventions and other events.
MGM said its forecast did not include any possible impact from the closing of the Mandalay merger, expected to occur in the first quarter.
The deal would make MGM the second largest casino operator in the world. If a competing merger between Harrah's Entertainment Inc. (HET) and Caesars Entertainment Inc. (CZR) also goes through, Harrah's would become the largest casino operator.
Deutsche Bank's Falcone said the 2005 convention calendar for Las Vegas was shaping up to be strong, with five major conventions already scheduled, totaling about 56,500 attendees.
Super Bowl Sunday and the Chinese New Year - two events in the first quarter that will bring more people to Las Vegas - have "not yet occurred," MGM's chief financial officer, Jim Murren, noted in a statement.
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