Why MGM Resorts' Shares Jumped
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of casino giant MGM Resorts (NYS: MGM) rose 10% today after the company reported earnings.
So what: Revenue rose 29% in the quarter to $2.32 billion on the company's consolidated accounting of MGM China, but fell slightly short of the $2.34 billion analysts expected. The company's loss was also larger than expected at $0.30 per share. Analysts had expected a $0.15-per-share loss.
Now what: The move today was really driven by better-than-expected performance in China and the company's candid outlook for the future. After competitors posted weak results in Macau, MGM said that revenue rose 6% on surprisingly strong traffic. This looks like an earnings miss, but shares had fallen in recent weeks as investors lowered expectations, so in reality the numbers were better than many expected.
The problem for me is that MGM is still losing money hand over fist, and that alone will keep me from getting too excited about the performance of shares today.
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The article Why MGM Resorts' Shares Jumped originally appeared on Fool.com.Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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