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LAS VEGAS-MGM Mirage on Tuesday reported an 18% increase in third quarter earnings due largely to Mississippi, not Las Vegas, where most of its casinos are located. In addition to its re-opened Beau Rivage casino there, performing profits also benefitted from insurance recoveries related to Hurricane Katrina damage.

The casino operator says it earned $183.9 million, or $0.62 per share, in the quarter, compared with $156.3 million, or $0.54 per share, in the same period one year earlier. Analysts expected a profit of $0.50 per share, according to Thomson Financial.

The insurance recoveries added $0.24 cents to the company’s earnings per share. The company did not break out revenue growth at Beau Rivage, but it did say that its net revenue, which met analyst expectations by increasing 6% to $1.9 billion, would have increased only 2% if Beau Rivage weren’t in the picture. In addition, it said gaming revenue increased 3% across the portfolio but, when Beau Rivage is excluded, decreased 3%.

While overall revenue rose 3.6% at the Vegas casinos, property EBITDA at its Vegas casinos decreased 3.5% to $469.6 million. In a conference call this morning MGM attributed its performance in Vegas to renovation expenses at several of its casinos there and a decreased hold percentage at the Bellagio in part due to the temporary closing of its baccarat table there.

With regard to hotel performance, MGM said room revenues increased 7% despite 29,000 fewer available rooms on the Las Vegas Strip due primarily to remodel activity at Mandalay Bay and Bellagio. Average room rates increased 5% at the company’s Las Vegas Strip resorts to $147 and occupancy remained solid at 97%. Food and beverage revenues increased 10% and entertainment revenues increased 13%, driven by the company’s portfolio of Cirque du Soleil productions.

“Key volume indicators that we have come to rely on to gauge our Las Vegas business remain strong,” said Jim Murren, MGM Mirage president and chief operating officer. “These metrics suggest continued growth over the upcoming quarters.”

Significant events during the quarter included the sales of 14.2 million shares of company stock to Dubai World for $1.2 billion; an agreement with Dubai World subsidiary Kerzner International for the development of an integrated resort at the north end of the Las Vegas Strip; the opening of MGM Grand Detroit casino and hotel complex earlier this month; and the announcement of plans for MGM Grand Atlantic City, a $5-billion casino-resort.

The CityCenter joint venture with Dubai World is expected to close before the end of the year. During the quarterly conference call, the company said its total investment in the project is currently $3 billion and upon closing of the JV it will receive from Dubai World $2 billion after taxes while continuing to own a 50% stake and receiving a management fee going forward. In addition, the company said the total development cost of the project has risen to $7.8 billion from $7.4 billion.

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