MGM 1Q loss balloons as costs increase

AP News
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Posted: May 03, 2012 10:10 AM
MGM 1Q loss balloons as costs increase

MGM Resorts International said Thursday its first quarter loss ballooned as higher costs and some one-time charges overshadowed a huge jump in sales.

MGM shares dropped nearly 4 percent in morning trading.

The Las Vegas casino and hotel operator lost $217.3 million, or 44 cents per share, in the January-March quarter, compared with a loss of $89.9 million, or 18 cents per share, a year earlier. Analysts predicted a smaller loss of 17 cents per share, according to FactSet. The one-time charges during the quarter were related to a dividend tax for MGM China and for paying down some long-term debt earlier than expected.

Revenue jumped 51 percent to $2.29 billion. Analysts forecast $2.26 billion.

Revenue from rooms at MGM resorts rose 3 percent across all the company. Room rates rose 4 percent at those resorts on the Las Vegas strip. Casino revenue rose 9 percent.

Revenue from MGM China rose 18 percent to $702 million, driven by increased play at table games and slots.

MGM China runs a Macau casino and went public in Hong Kong last June. Macau is the only place in China where gambling is legal. Casinos in the U.S. were slower to recover from the economic downturn, and gambling companies looked abroad for growth.

Expenses swelled to 48 percent to $2.08 billion during the quarter.

Shares dropped 51 cents, or 3.7 percent, to $13.05 in morning trading.