X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

LAS VEGAS-MGM Mirage Inc. and Las Vegas Sands Corp. watched their share prices fall 7% Thursday despite posting profits and meeting Wall Street expectations for earnings. At issue in both cases was the local gaming market.

MGM’s profit in the second quarter climbed 4% from the same 2005 period, the company announced Thursday morning. Company executives attributed the increase to strong performance at the Bellagio and other high-end properties. Then they cited an apparent softening in its lower-end “value” properties like Circus Circus and predicted a lower-then-expected profit for the third quarter. Trading at nearly four times average volume, shares hit a 52-week low of $34.24 before rebounding to $35.21, down just over 7% ($2.69) on the day.

MGM’s second quarter net income increased to $146.4 million, or $0.50 cents per share, from $141.2 million, or $0.48 cents per share, in the same period last year. Wall Street’s average expectation was for $0.53 per share. MGM also projected earnings of $0.40 per share for the third quarter, about 10% below previous expectations. MGM’s revenue for the quarter rose 9% to $1.87 billion from $1.72 billion in the same period a year ago, but Wall Street expected $1.8 billion. Earnings would have been $0.56 per share save for one-time charges such as pre-opening expenses related to the Beatles-Cirque du Soleil show “Love” at the Mirage.

Las Vegas Sands Corp. reported a 27% jump in second quarter profit after the close of trading Wednesday. Company officials cited another record performance by its Macau casino. Then they cited inefficiencies in its operations at the Venetian in Las Vegas. On Thursday, investors traded four million more shares than usual and at the end of the day Las Vegas Sands shares stood at $60.81, off 6.85% ($4.47) on the day.

Las Vegas Sands’ net profit came in at $109.3 million, or $0.31 per shares, from $86.4 million, or $0.24 per share, from the same 2005 period. Revenue rose 30% to $517 million. Wall Street expected $0.34 per share on $520.7 million in revenue.

“It was a weak quarter all the way around in Vegas for everybody,” CEO Sheldon Adelson told analysts on a conference call Wednesday. “One weak quarter does not [make a trend].”

Looking ahead, MGM broke ground in June for its $7-billion CityPlace mixed-use project on the Strip in Vegas and will complete MGM Macau in late 2007. Las Vegas Sands will complete the Venetian Macao next summer, one of several it plans to develop in that market. In May, Las Vegas Sands also won a bid to build Singapore’s first casino, which is set to open at Marina Bay in 2009.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt
Live Chat

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.