MGM Resorts’ Vegas revenue grows in Q1, but Macau still a losing bet

Earnings per share minus one-time items dropped 64% to 12 cents compared to Q1 2015, a penny above analysts’ consensus. Total revenue dropped 9% to $2.21 billion, as higher income from U.S. operations was outweighed by an 11% drop in casinos gambling revenue, mainly on a smaller take from table games in Macau.

Net revenue at the company’s U.S. casinos rose 3%, and room revenues for U.S. hotels climbed 7%.

However, net revenue from its casinos in the Chinese gambling hotspot of Macau, which has been mired in a nearly two-year long recession, plunged 26% to $469 million. However, there have been some recent signs that Macau casino revenue woes generally are starting to ease.

MGM competes in Macau with the world’s largest casino company Las Vegas Sands (LVS), as well as Melco Crown Entertainment (MPEL) and Wynn Resorts (WYNN). Wynn Resorts is slated to release quarterly results after the market close Thursday.

During Q1, MGM completed the spinoff of its land holdings as a real estate investment trust. MGM received a total $1.6 billion cash from the $1.2 billion MGM Growth Properties IPO and a separate special distribution from the sale of The Shops at Crystals, a shopping, dining and entertainment venue at its CityCenter complex in Las Vegas.

MGM also opened The Park, an outdoor pedestrian area with dining and entertainment, during the quarter, and the T-Mobile Arena, a 20,000-seat theater, both on the Las Vegas Strip.