MGM Resorts International MGM reported fourth-quarter 2022 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. Following the results, shares of the company increased 5% in the after-hours trading session on Feb 8.
Bill Hornbuckle, CEO and president of MGM Resorts International, stated, "We achieved our fifth consecutive quarter of record-breaking Las Vegas Strip Resorts Adjusted Property EBITDAR in the fourth quarter. We believe that there is strong momentum in our business and our 2023 outlook remains bright, driven by a robust events calendar domestically, MGM China's rapid year-to-date return to profitability and BetMGM's ongoing improvement in 2023."
Earnings & Revenue Discussion
MGM Resorts reported diluted earnings per share (EPS) of 69 cents, beating the Zacks Consensus Estimate of a loss of $1.60. In the prior-year quarter, the company reported diluted EPS of 23 cents.
MGM Resorts International Price, Consensus and EPS Surprise
MGM Resorts International price-consensus-eps-surprise-chart | MGM Resorts International Quote
Total revenues were $3,592.2 million, surpassing the Zacks Consensus Estimate of $3,349 million. The top line increased 17.5% from $ 3,056.9 million reported in the year-ago period. The upside was primarily driven by increased business volume and travel activity, primarily at the Las Vegas Strip Resorts and Regional Operations.
MGM China
During the quarter, MGM China's net revenues fell 44.5% year over year to $174.7 million. The downside was mainly due to COVID-19-related property closures at MGM Cotai and travel and entry restrictions in Macau. VIP Table Games turnover declined 44% year over year to $980 million. MGM China casino revenues decreased 47% year over year to $145 million.
MGM China's adjusted property EBITDAR (Earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs) amounted to ($55) million against the adjusted property EBITDAR of $5 million reported in the prior-year quarter.
Domestic Operations
Net revenues at Las Vegas Strip Resorts during the fourth quarter were $ 2,297.3 million, up 27.2% year over year. The company benefited from increased business volume and travel activity on a year-over-year basis. Also, the addition of The Cosmopolitan and Aria added to the upside.
Adjusted property EBITDAR surged 25.5% year over year to $877 million. Casino revenues in the quarter under review were $554 million, up 2% year over year.
During the quarter under review, net revenues from the company's regional operations totaled $991.5 million, up 10.2% from the prior-year quarter’s levels. Casino revenues in the quarter came in at $742 million compared with $697 million reported in the prior-year quarter.
Adjusted property EBITDAR was $320 million, up 3% year over year. Adjusted property EBITDAR margin contracted 215 basis points year over year to 32.2%.
Balance Sheet & Share Repurchase
MGM Resorts ended the fourth quarter with cash and cash equivalents of $5,911.9 million compared with $5,295.4 million reported in the previous quarter. The company's long-term debt at the end of the quarter stood at $ 7,432.8 million, down from $7,209.8 million as of Sep 30, 2022.
During the fourth quarter, the company repurchased nearly $11 million shares at an average price of $32.96 per share for $352 million. As of Dec 31, the company stated the availability of $475 million under its repurchase program.
2022 Highlights
Total revenues in 2022 came in at $13.1 billion compared with $9.7 billion in 2021.
Operating Income in 2022 came in at $1.4 billion compared with $2.3 billion in 2021.
In 2022, adjusted EPS came in at $(2.74) compared with (67) cents reported in the previous year.
Zacks Rank & Key Picks
MGM Resorts carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the Zacks Consumer Discretionary sector are OneSpaWorld Holdings Limited. OSW, Las Vegas Sands Corp. LVS and Manchester United plc MANU.
OneSpaWorld currently sports a Zacks Rank #1. OSW has a trailing four-quarter earnings surprise of 84.2%, on average. Shares of the company have increased 7.9% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates a rise of 24.2% and 91%, respectively, from the year-ago period’s levels.
Las Vegas Sands sports a Zacks Rank #1. LVS has a long-term earnings growth rate of 4.9%. The stock has increased 23.2% in the past year.
The Zacks Consensus Estimate for LVS’ 2023 sales and EPS indicates a rise of 100.8% and 217.5%, respectively, from the year-ago period’s estimated levels.
Manchester carries a Zacks Rank #2 (Buy). MANU has a trailing four-quarter earnings surprise of 34.4%, on average. Shares of the company have gained 69.8% in the past year.
The Zacks Consensus Estimate for MANU’s 2024 sales and EPS indicates a rise of 11.4% and 27.8%, respectively, from the year-ago levels.
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