GM Mirage, the world’s second-largest casino company, said net profit grew 18 percent to us$ 183.9 million and revenue rose 6 percent to us$ 1.90 billion. After stripping out one-time items, earnings per share fell to 42 cents, analysts said, below the 50 cents per share expected by those surveyed by Thomson Financial. Consensus estimates put sales at us$ 1.91 billion.
Corporate expenses rose due to planning for future projects, said President and Chief Operating Officer Jim Murren. CEO Terry Lanni said on a conference call with analysts that MGM Mirage was again in talks with Dubai World on "a significant amount of other global projects." That’s on top of their 50-50 joint venture on the CityCenter complex to open in late 2009 on the Las Vegas Strip, and work with Dubai World and Kerzner International Holdings Ltd. on a multibillion-dollar Las Vegas casino complex to open in 2012.
The company also recently announced plans for an up-to-us$ 5-billion MGM Grand Atlantic City to open in 2012, and said it was interested in bidding on land at Bader Field, an unused airport that the city is considering putting up for proposals.
MGM Mirage shares fell us$ 1.63, to close at us$ 91.29 Tuesday. Shares edged down another 59 cents after hours. The company is majority owned by Tracinda, the investment arm of billionaire Kirk Kerkorian.
Analysts were mixed on the results but said shares would be buoyed by Dubai World’s interest in further projects and possible moves by Kerkorian to boost shareholder value.
"It is hard to ignore what looks to be like a deceleration in profitability and rising development costs," said Goldman Sachs analyst Steven Kent in a research note. "(But) we continue to think MGM shares will trade primarily based on expectations that Dubai World is interested in owning more shares of the company, which should provide some support."
Wynn Resorts Ltd., the casino company run by billionaire Steve Wynn, reported third-quarter net income was us$ 44.7 million, and revenue more than doubled to us$ 653.4 million as Chinese gamblers flocked to a new Wynn casino in Macau and visitors continued to frequent the company’s upscale property in Las Vegas.
The profit of 41 cents per share was below the us$ 6.43 per share during the same quarter a year ago, when the company booked a us$ 779 million one-time gain from the sale of rights to develop casinos in Macau to Melco PBL Entertainment Ltd.
Adjusted net profit, excluding one-time items, was us$ 73.4 million, compared with an adjusted net loss of us$ 1.3 million from a year ago. Analysts polled by Thomson Financial, on average, expected revenue of us$ 637 million.
Company CEO Steve Wynn told analysts on a conference call that concerns about a housing slump affecting gambling in the U.S. and the opening of Las Vegas Corp.’s huge Venetian Macao in late August had no effect on the company’s operations.
"We tend to be deliciously insulated from some of these macro market trends," he said. "It seems like quality, wherever it is, is its own reward. Bigger ain’t better. Better is better. That’s what we’re learning in China. That’s what we’re learning in Macau. Just like Las Vegas."
The company is moving ahead with plans to finish the us$ 2.2 billion Encore property, set to open beside Wynn Las Vegas, in early 2009. It is also building an expansion tower in Macau called Wynn Diamond Suites, costing as much as us$ 600 million, to open in 2010.