MGM earned $.54 in Q3. Analysts had forecast $.41.
Revenues were up 5% to a new record of $1.9 Billion
A Winning Hand at MGM Mirage
A few notes from the conference call follow the jump.
MGM's Quarterly calls are always impressive. Terry Lanni and Jim Murren consistently speak knowledgeably and clearly. Bobby Baldwin, head of Mirage Resorts, doesn't come across as confidently, but his record, previously with Wynn and now with MGM, speaks for itself. MGM is an impressive operator.
Casino revenue was up 5%.Lanni said slot revenue at Bellagio was up 15%, 17% at TI and 12% at MGM Grand. He gave credit to the power of the Players Club. This may explain why my slot offers from Bellagio aren't as good as in the past. They have bigger players to court.
Baccarat is booming with revenue up 22%. Lanni said all high-end table games were strong, and he speculated that business owners and executives are doing well now and are spending more in casinos. He added that MGM expects this strong trend to continue through both the western New Year and the Chinese New Year. Very bullish!
MGM no longer breaks out all individual property stats, but Lanni/Murren/Baldwin (I couldn't keep track of who said what) said EBITDA at some properties set records. Bellagio's was $98 Million which set a new record, up 39% over last year. The Mirage hit $70 Million, the best in seven years, and its hotel revenue was the highest in history. Murren and Baldwin gave a lot of credit for The Mirage's improvement to the new casino floor, new restaurants and clubs, and the new Cirque Beatles show, "Love." I believe they said Revolution ultralounge will open December 15.
The were proud of the way they re-opened Beau Rivage on schedule on the first anniversary of Hurricane Katrina. EBITDA was $14.8 Million for 33 days compared to $12.4 Million for last year's 59 day Quarter, shortened by Katrina. The retail street of shops opened last week, and the remaining restaurants will open before New Year's.
MGM Grand had EBITDA of $83.6 Million, also a record.The three MGM Grand Signature towers brought in profits of $26, $70 and $80 Million. Sales per sq ft started out at $788 in Tower 1 and in Tower 3 is $1,067. Unreal! By the way, in answer to an analyst's question, they said they're planning on about the same from all the condos/condo hotel units in CityCenter, $1,067 sq ft.
They seemed pleased with their planning for CityCenter which enabled them to lock in materials, contractors, etc and will complete the project on time, on budget. The CityCenter's preview center in Bellagio is giving them 500 prospects a week. A similar center will open in The Mirage, and the grand opening of the big permanent sales center on the Strip between NYNY and Monte Carlo will be the first week of January.
I can't read my notes, but Mandalay Bay and Luxor did well in the Quarter as did MGM Grand Detroit. The permanent Detroit casino/hotel will open in Q2 '07. Slot revenue in Detroit was up 11%, another record.
The mid-market properties of Circus and Excalibur are doing well because there are fewer properties attracting budget-minded guests. Also, lower gas prices are favorable to these properties for drive-in customers.
I'm not familiar with the I-15 construction, but Lanni said it's not adversely affecting their customers driving in from California.
Not much on Macau other than MGM Grand Macau will open toward the end of '07.
An analyst asked about plans for Atlantic City. Lanni said they may have plans to discuss next year. They have 71 acres near Borgata which they will develop as a "CityCenter East" and will not partner with anyone.
End of my notes.