MGM Resorts International posted first-quarter results that fell short of Wall Street expectations on Thursday, with adjusted earnings per share of $0.49 compared with the $0.53 average estimate compiled by LSEG. The company cited weaker trends in its Las Vegas businesses amid what it described as ongoing macroeconomic uncertainty.
Company data show revenue from its Las Vegas Strip Resorts totaled $2.2 billion for the first quarter, a figure that was slightly above the year-ago period but did not translate into higher-than-expected profit. MGM said falling visits to Las Vegas have dampened demand for luxury vacations at its regional properties, which include resorts, hotels and casinos.
Chief Executive Bill Hornbuckle pointed to some encouraging activity within the Las Vegas portfolio, saying, "We are seeing signs of strength driven by solid convention bookings, our newly launched all-inclusive promotion, and our recently refreshed rooms at the MGM Grand Las Vegas." The comment framed pockets of resilience even as overall Las Vegas performance weakened.
For the quarter ended March 31, MGM reported total revenue of $4.45 billion, a 4.1% increase versus the prior-year quarter. That top-line result exceeded the average analyst estimate of $4.37 billion. Outside the U.S., MGM China contributed $1.1 billion in revenue, up 9% for the period.
The gap between revenue growth and adjusted earnings-per-share expectations underscores narrower profitability in the quarter. The company attributed that outcome primarily to softer Las Vegas visitation and the prevailing macroeconomic backdrop, which weighed on high-end leisure demand.
As investors and analysts evaluate the company following the release, attention will likely remain on how MGM manages Las Vegas occupancy and spend trends, convention bookings, and the impact of recent marketing initiatives and room refurbishments on revenue mix and margins.
Key points
- Adjusted EPS of $0.49 missed the LSEG consensus of $0.53.
- Total revenue rose 4.1% to $4.45 billion for the quarter ended March 31, above the $4.37 billion analyst average.
- Las Vegas Strip Resorts revenue was $2.2 billion, slightly higher than a year earlier; MGM China revenue increased 9% to $1.1 billion.
Risks and uncertainties
- Ongoing macroeconomic uncertainty that can suppress demand for luxury leisure travel, affecting hospitality and gaming sectors.
- Declining visits to Las Vegas that reduce occupancy and discretionary spend at regional resorts, hotels and casinos.
- Potential pressure on profitability if revenue growth in other segments does not offset softness in Las Vegas operations.