UPDATE 2-MGM Resorts results miss estimates on weak U.S. demand
* Third-quarter loss $0.23 per share vs estimated loss $0.17
* Revenue up 1 pct, China MGM revenue up 7 pct
* Shares down 4.1 percent
By Sue Zeidler
Oct 31 (Reuters) - Casino operator MGM Resorts International posted a larger loss, missing analysts' expectations, due to a steep drop in tax benefits, soft demand in Las Vegas and disappointing margins in Macau.
Shares of the operator of the Mirage and Bellagio casino resorts MGM Resorts fell 4.1 percent to $10.16 on the New York Stock Exchange.
MGM Resorts reported tax benefits of $2.6 million for the third quarter, significantly below the previous-year's $79.7 million from its Asian operations.
The company, which has been aggressively chasing growth in China, said revenue from MGM China grew 7 percent in the third quarter.
The unit, which accounts for nearly 30 percent of MGM Resorts' overall business, got approval earlier this month to build a $2.5 billion casino project in Macau, the world's biggest gambling market.
MGM China's adjusted earnings before interest, taxes depreciation and amortization (EBITDA) were $152 million, including $5 million of branding fee expense, well below some analysts' forecasts.
UBS analyst Robin Farley had projected the China unit's EBITDA of $186 million, and said its EBITDA margin of 23.6 percent was below her estimate of 26.9 percent, as well as the Street's projected 25 percent margin.
Other analysts had revised their estimates lower. "It wasn't a great quarter but it was in line with muted expectations. MGM is more optimistic about the fourth quarter and next year. They need to show it will be better," said Felicia Hendrix of Barclays.
Hurt by a decline in its U.S. business, overall third-quarter revenue rose just 1 percent to $2.25 billion, missing analysts' average estimate of $2.28 billion.
The company, which competes with Las Vegas Sands Corp and Wynn Resorts Ltd, said early trends at its domestic resorts showed some improvement in the current quarter.
"Forward convention booking pace is showing growth in 2013 and is further accelerating into 2014," Chief Executive Jim Murren added in a statement.
MGM's third-quarter loss widened to $181.2 million, or 37 cents per share, from $123.8 million, or 25 cents per share, in the prior-year quarter.
Excluding one-time items, the company posted a loss of 23 cents per share, worse than the 17 cents analysts had expected.
Revenue from the company's wholly-owned domestic resorts fell 2 percent to $1.5 billion in the third quarter.
- Malaysia Airlines plane missing at sea off Vietnam, presumed crashed |
- China draws 'red line' on North Korea, says won't allow war on peninsula
- Warning shots fired to turn monitors back from Crimea |
- Malaysian plane crashed off Vietnam coast: state media