* Adjusted EPS $0.01/shr vs. estimate loss $0.08/shr
* Revenue $1.53 billion vs. estimate $1.47 billion
* Amends credit facility
* Shares rise 1.9 percent
(Adds company comments, updates share price)
By Deena Beasley
LOS ANGELES, Nov 5 (Reuters) - MGM Mirage (MGM.N) posted a
third-quarter loss on Thursday as consumers spent less at its
Las Vegas resorts and it wrote down the value of its latest
casino project, but the results were better than expected and
shares rose nearly 2 percent.
The No. 2 casino operator, which has come close to
defaulting on its debt, also amended its credit facility,
allowing it to raise up to $1 billion of unsecured debt as long
as half of the proceeds above $250 million are used to reduce
existing senior debt.
"What this amendment accomplishes is bringing our facility
back to the type of terms that we've always had with our
banks," Chief Executive Jim Murren said on a conference call
with analysts and investors.
MGM, whose largest shareholder, Kirk Kerkorian, has said
he may cut his stake, reported a net loss of $750.4 million, or
$1.70 a share, compared with year-earlier net income of $61.3
million, or 22 cents a share.
Charges totaled $1.72 a share, including a writedown of the
$8.5 billion CityCenter project, a joint venture with Dubai
World which is set to open on the Las Vegas Strip in December.
Excluding one-time items, the company earned 1 cent per
share, well ahead of the 8-cent-per-share loss forecast by
analysts, as compiled by Thomson Reuters I/B/E/S.
"They did a little better than people had expected," said
KeyBanc Capital Markets analyst Dennis Forst. "But the focus is
on CityCenter and a turnaround in the economy."
He said MGM's gaming results were ahead of expectations,
"but everything else still indicates that business is quite
difficult."
Las Vegas hotel occupancy was flat but rates fell 23
percent. Slot machine volume fell 6 percent, but that was an
improvement from the 11 percent year-over-year drop seen in the
second quarter.
"A recovery in convention and business travel is key to
increasing rates," CEO Murren said. "And based on early
bookings it looks to us like that is achievable in the second
half of 2010 and throughout 2011."
He said the company's revenue per available room in Las
Vegas will begin to increase year-over-year in either the
second or third quarter of next year and will be positive for
full-year 2010.
MGM's quarterly revenue, adjusted for promotional
allowances, fell 14 percent to $1.53 billion but beat the $1.47
billion forecast by analysts.
"MGM reported generally solid third quarter results on
lowered expectations," Goldman Sachs analyst Steven Kent said
in a research note. "We remain cautious on Las Vegas' operating
trends heading into a 10 percent supply increase starting next
month with CityCenter."
Murren said MGM intends to leverage CityCenter and increase
its share of the Las Vegas market. With extra business from the
new property, he projected a table game market share in the low
40s over the next couple of years, compared with the current
level of around 35 percent. For slots, he expects MGM's share
to rise to the mid-30s from the current 30 percent.
The company's credit amendment also allows it to raise
equity, provided that half of the proceeds above $500 million
are used to reduce senior debt, but Murren said MGM has "no
plans in the foreseeable future to issue equity in any form."
Shares of MGM, whose holdings include nine Las Vegas Strip
casino-hotels, gambling resorts in Mississippi and Michigan,
and joint ventures in New Jersey and China's Macau, were up 18
cents at $9.50 on the New York Stock Exchange.
(Additional reporting by Karen Jacobs in Atlanta; editing by
Derek Caney, Dave Zimmerman and Matthew Lewis)
