Active Stock Momentum: MGM Resorts International’s (NYSE: MGM)

On 06 Dec 18, MGM Resorts International’s (NYSE: MGM) shares price traded between $25.91 and $27.42 during the last trading session upbeat/downbeat with 1.56% at $27.42. The shares recorded trading volume 9,349,185 shares as compared to its average volume of 8,131,453 shares. The company has 534.24 million shares outstanding and market value of 14.456B.

MGM Resorts International (MGM) recently stated financial results for the quarter ended September 30, 2018. On January 1, 2018, the Company adopted the new revenue recognition accounting standard (ASC 606). As such, certain before stated 2017 numbers have been retrospectively adjusted under the new standard to assist with comparability to the previous period.

Third Quarter 2018 Financial Highlights:

  • Diluted earnings per share of $0.26in both the current and previous year quarters;
  • Consolidated net revenues raised 7% contrast to the previous year quarter to $3.0B;
  • Net revenues reduced 2% contrast to the previous year quarter at the Company’s domestic resorts to $2.2Band reduced 3% on a same-store basis, not including contributions from the opening of MGM Springfield on August 24, 2018;
  • REVPAR(1) reduced 3.9% contrast to the previous year quarter at the Company’s Las Vegas Strip resorts;
  • Operating income of $435Mat the Company’s domestic resorts, contrast to $545M in the previous year quarter. The current quarter was influenced by $31M of preopening expenses at MGM Springfield, continued disruption at Park MGM and a decrease in casino and non-casino revenues at the Company’s Las Vegas Strip resorts;
  • Net income attributable to MGM Resorts of $143M, contrast to $148Min the previous year quarter;
  • Domestic resorts Adjusted Property EBITDA(2)of $627M, a 12% decrease contrast to $712M in the previous year quarter and a 13% decrease on a same-store basis;
  • Same-store operating margin of 21.2% in the current quarter at the Company’s domestic resorts, a 283 basis point decrease contrast to the previous year quarter;
  • Same-store Adjusted Property EBITDA margin of 28.3% in the current quarter at the Company’s domestic resorts, a 313 basis point decrease contrast to the previous year quarter;
  • MGM China operating income of $52Mcontrast to $38M in the previous year quarter and Adjusted Property EBITDA of $130M, a 7% raise contrast to the previous year quarter as a result of the opening of MGM Cotai;
  • CityCenter operating income from resort operations of $28Mand Adjusted EBITDA from resort operations of $85M, a 20% decrease in Adjusted EBITDA from resort operations contrast to the previous year quarter;
  • Distributed $64Mto shareholders via the Company’s quarterly dividend of $0.12per share; and
  • Repurchased $176Mof the Company’s ordinary stock in the third quarter.

Corporate Expense

Corporate expense, including share-based compensation for corporate employees was $98M in the third quarter of 2018, an raise of $10M contrast to the previous year quarter, due primarily to an raise in transaction costs related to the Empire City acquisition, the formation of the MGM GVC Interactive LLC joint venture, and MGM Growth Properties LLC’s (“MGP”) Hard Rock Rocksino Northfield Park acquisition.

MGM China

Key third quarter results for MGM China include:

  • Net revenues of $606M, a 37% raise contrast to the previous year quarter. The current quarter benefited from the opening of MGM Cotai in February 2018, which contributed $172Mof net revenues;
  • Main floor table games win raised 43% contrast to the previous year quarter due primarily to the opening of MGM Cotai;
  • VIP table games win raised 11% contrast to the previous year quarter due primarily to an 8% raise in VIP table games win at MGM Macau;
  • Operating income was $52Min the current quarter contrast to $38M in the previous year quarter;
  • Adjusted Property EBITDA raised 7% to $130Mcontrast to $121M in the previous year quarter. The current quarter included $11M of license fee expense contrast to $8M in the previous year quarter; and
  • Operating margin was 8.6% in the current year quarter, and Adjusted Property EBITDA margin was 21.5% in the current quarter contrast to 27.4% in the previous year quarter, due primarily to the ramp-up of operations at MGM Cotai.

MGM Growth Properties

  • During the third quarter of 2018, the Company made rent payments to MGM Growth Properties Operating Joint Venture LP (“MGP Operating Joint Venture”) in the amount of $193Mand received distributions of $84M from the MGP Operating Joint Venture. On September 17, 2018, the Board of Directors of MGP accepted a quarterly dividend of $0.4375 per Class A share (based on a $1.75 dividend on an annualized basis) totaling $31M, which represents an raise of $0.07 per share year to date, for a total raise of 4.2% year to date, which was paid on October 15, 2018 to holders of record on September 28, 2018. The Company con-presently received an $85M distribution attributable to its ownership of MGP Operating Joint Venture units.
  • On July 6, 2018, MGP completed the before reported acquisition of the Hard Rock Rocksino Northfield Park for about $1.1B.

Financial Position

The Company’s cash balance at September 30, 2018 was $1.3B, which included $663M at MGM China and $50M at the MGP Operating Joint Venture. At September 30, 2018, the Company had $14.8B of principal amount of indebtedness outstanding, including $228M outstanding under its $1.5B senior secured credit facility, $2.8B outstanding under the $3.6B MGP Operating Joint Venture senior secured credit facility and $2.5B outstanding under the $2.9B MGM China credit facility.

The short ratio in the company’s stock is documented at 2.12 and the short float is around of 3.59%. The average true range of the stock is observed at 1.07 and the relative strength index of the stock is recorded at 54.00.The firm has PEG ratio of 11.30 and price to cash ratio of 11.24.

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