Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: Jorj X Mckie who wrote (56520)	10/29/2008 11:08:02 AM
From: MulhollandDrive	1 Recommendation Read Replies (1) \| Respond to of 57110

damn....look at the move today in MGM....something doesn't add up though...anecdotal evidence of vegas still quite busy and room occupancy at 95%...67% drop in profit on a 6% drop in revenue...and the stock is up big! i think the bottom may be in :) marketwatch.com MGM 11.29, +0.96, +9.3%) said it earned $61 million, or 22 cents a share, down from $184 million, or 62 cents a share, in the same period last year. The latest results included a write-down of 7 cents a share related to the Primm Valley Golf Club. Revenue came in at $1.79 billion, down 6%. The average estimate of analysts polled by Thomson Reuters had been for the company to earn 34 cents a share on revenue of $1.83 billion. Still, some investors expected worse: Shares of MGM soared better than 22% out of the open, although at less than $13, they are still a fraction of the $100 level they cracked just one year ago. Casino revenue fell 8% while room revenue fell 10%, with a 9% drop on the Las Vegas Strip. Average occupancy levels at its Strip resorts were 95%, down from 97%. Revenue per available room, a key industry metric, slipped to $128 from $143 on the Strip. "While our margins have held up well in a difficult environment, we continue to make permanent improvements to our cost structure which will benefit us now and into the future," said Jim Murren, president and chief operating officer of MGM Mirage. "We believe we have plentiful opportunities to further reduce costs and we are dedicated to maximizing our cash flows." The company also said it will postpone development at MGM Atlantic City, citing the weak economy and impact of the credit crunch. "We continue to believe that Atlantic City represents an important market for further development," said Terry Lanni, chairman and chief executive. "We intend to resume development at such time as economic conditions and capital markets are sufficiently improved to enable us to go forward on a reasonable basis." It has also halted design and pre-construction activities at its planned joint-venture resort complex on the southwest corner of the Las Vegas Strip and Sahara Avenue in Las Vegas. In a note to investors, Oppenheimer's David Katz wrote that the Strip results were about as weak as expected but "on the positive side, management appears to be taking aggressive steps to offset the weakening demand trends, which should preserve some profitability." MGM Mirage is far and away the biggest resort operator in Las Vegas, with a stable of properties including Bellagio, Mandalay Bay, Luxor and MGM Grand. It also has casinos in Illinois and Mississippi, along with a half-stake in the Borgata in Atlantic MGM Mirage also opened a casino in Macau late last year. End of Story