MGM Resorts rises as quarterly loss narrows on Macau

Excluding some items, the loss was 16 cents, smaller than the 19-cent average of 24 analysts’ estimates compiled by Bloomberg.

Most of MGM’s 10 Las Vegas Strip resorts exceeded analyst expectations, signalling a firming of the recovery from a record two-year slump in gambling and conventions. In Macau, the world’s biggest casino market, total gambling revenue rose 43 % in the quarter, helping MGM’s joint venture in the Chinese region more than double its income.

 “The recovery is clearly under way right now and it’s gaining traction,” Chairman and CEO Jim Murren said in a telephone interview. “It was really across the portfolio in leisure and retail travelers and conventions.”

 He forecast that the convention business growth rate will be in “double digits” this year and in 2012.

 MGM gained US$ 1.47, or 11 %, to US$ 14.36 at 3:24 p.m. in New York Stock Exchange composite trading. Earlier, the shares rose as much as 12 percent, the most intraday since October 8th . They declined 13 % this year before today.

 Sales Increase

Revenue rose 3.3 % from a year earlier to US$ 1.5 billion, in line with the average estimate of analysts. Cash flow at wholly owned casinos, or adjusted earnings before interest, taxes, depreciation and amortization, rose 12 % to US$ 301 million.

In Las Vegas, Revpar, a measure of room rates and occupancy, rose 16 %, as occupancy climbed to 87 % from 85 % and as the company charged resort fees. Excluding daily resort fees, Revpar increased 11 %. The pace of bookings is ahead of last year across conventions and events, and the usually soft summer period, Murren said.

Convention room nights, which often fetch higher prices than vacationer nights, will be 14 percent of MGM’s Las Vegas bookings this year, rising from 12 % in 2010, and exceeded 20 % in the first quarter, the company said.

 Macau Venture

Total operating income from MGM’s Macau joint venture rose to US$ 126 million from US$ 49 million a year earlier, the company said. MGM plans to take 51 % control of its China Holdings Ltd. when partner Pansy Ho sells part of her stake in a Hong Kong initial public offering this year.

Resort Ebitda at the US$ 8.5 billion CityCenter joint venture of hotels, condominiums, a casino and mall on the Las Vegas Strip was US$ 64 million in the first quarter, on revenue of US$ 262 million.

MGM and partner Dubai World opened CityCenter in December 2009 after the project skirted bankruptcy. The partners replaced most of the property’s US$ 1.8 billion loan with bonds with later maturities this year.

MGM Resorts has signed up more than 1 million customers to its new M Life loyalty program, Murren said. The company has formed alliances with rental-car company Avis Budget Group (CAR), Delaware casino owner Dover Downs Gaming & Entertainment (DDE), and Rank Group (RNK), the U.K. operator of casinos and bingo clubs, the CEO said on a conference call.

MGM is negotiating marketing alliances to offer reciprocal rewards with other companies including casino owners outside Nevada to draw more visitors build its loyalty database and reduce marketing costs.