Casino operator MGM Resorts International said its third-quarter loss shrank as gambling revived in Las Vegas and thrived in Macau, but its 43 percent jump in revenue wasn't as high as expected and investors were unimpressed.
Shares of the company, in which billionaire investor Kirk Kerkorian still holds a major stake, fell more than 6 percent Thursday.
Excluding an $80 million charge to reflect the plunging value of its Circus Circus casino in Reno, Nev., MGM Resorts lost 14 cents per share. That's a penny less than analysts expected, according to FactSet. But the company's quarterly revenue of $2.23 billion, including $623 million in China, fell short of the $2.25 billion analysts expected.
Casino companies with a strong presence in Macau, the only place in China where gambling is legal, have done best since the recession, which led many patrons to pull back on gambling in the U.S. In addition to MGM Resorts, Las Vegas Sands Corp., Wynn Resorts Ltd. and Melco Crown Entertainment Ltd. have properties in Macau.
For the three months that ended Sept. 30, MGM Resorts lost $123.8 million, or 25 cents per share.
In 2010's third quarter, it lost $318 million, or 72 cents per share, when it slashed $357 million from the book value of its half of the massive CityCenter development on the Las Vegas Strip.
MGM Resorts' performance included a full quarter of results from MGM China, in which the company acquired a controlling 51 percent interest when MGM China went public on the Hong Kong stock exchange in June. Before that MGM Resorts had a 50 percent stake.
In the U.S., the company's occupancy and revenue per available room improved at resorts on the Las Vegas Strip. Revenue per available room is a key gauge of a lodging company's health.
Looking ahead, CEO Jim Murren said during a conference call that bookings and current asking rates are up, with the convention business particularly strong.
"September was one of our highest convention booking production months ever, and I think that emphasizes the fact that our group business for 2012 and beyond remains quite robust," he said.
The company's revenue from U.S. resorts fell 2 percent in the quarter. Slots revenue climbed 4 percent, with Las Vegas Strip resorts casino revenue up 6 percent.
The improvements in Las Vegas are important because it is the highest-profile U.S. gambling market. The better results there show consumers may now be more willing to spend on gambling and related amenities.
Deutsche Bank's Carlo Santarelli said in a client note that the Las Vegas casino and hotel results are "speaking to an improving leisure customer, encouraging in our view."
The analyst maintained a "Buy" rating and $17 price target for shares of MGM Resorts.
MGM Resorts shares fell 69 cents, or 6.1 percent, to $10.67 by Thursday afternoon. Over the last year the stock has traded between $7.40 and $16.94.
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