MGM Resorts International Increases Sales but Misses Estimates on Earnings

Seth Jayson, The Motley Fool

MGM Resorts International (NYS: MGM) reported earnings on May 3. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), MGM Resorts International beat slightly on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue improved significantly and GAAP loss per share increased.


Gross margins shrank, operating margins increased, and net margins contracted.

Revenue details
MGM Resorts International tallied revenue of $2.29 billion. The 16 analysts polled by S&P Capital IQ expected revenue of $2.26 billion on the same basis. GAAP reported sales were 51% higher than the prior-year quarter's $1.51 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at -$0.35. The 21 earnings estimates compiled by S&P Capital IQ anticipated -$0.16 per share. GAAP EPS were -$0.44 for Q1 versus -$0.18 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 34.5%, 280 basis points worse than the prior-year quarter. Operating margin was 9.0%, 200 basis points better than the prior-year quarter. Net margin was -9.5%, 360 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $2.36 billion. On the bottom line, the average EPS estimate is -$0.11.

Next year's average estimate for revenue is $9.39 billion. The average EPS estimate is -$0.47.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,131 members out of 1,369 rating the stock outperform, and 238 members rating it underperform. Among 298 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 251 give MGM Resorts International a green thumbs-up, and 47 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on MGM Resorts International is outperform, with an average price target of $16.15.

At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. 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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