Casino and resort operator MGM Resorts International reported impressive second-quarter results, surpassing expectations. The company attributed its success to the easing of pandemic restrictions in Macau, the global gaming hub. Despite this positive news, MGM's shares experienced a decline after hours.
Financial Performance
MGM posted a net income of $243.5 million, or 55 cents per share, in the second quarter. This result represents a decrease compared to the same period last year when the company recorded $1.6 billion in net income, or $4.20 per share. The decline can be attributed to a substantial gain from the sale of its subsidiary, MGM Growth Properties, in the previous year.
On the revenue front, MGM's second-quarter earnings rose to $3.94 billion, up from $3.26 billion in the prior-year quarter. The primary driver for this increase was the successful reopening of Macau. When adjusted for gains on debt and equity as well as taxes, MGM earned 59 cents per share. Analysts surveyed by FactSet expected adjusted earnings per share of 56 cents, with revenue projected at $3.82 billion.
Market Response
Following the release of these results, MGM's shares experienced a 5.6% decline in after-hours trading on Wednesday.
Future Outlook
Chief Executive Bill Hornbuckle expressed optimism for the remainder of 2023 and beyond. He emphasized promising developments such as the pacing of both Formula 1 and the Super Bowl, as well as the announced relocation of the A's baseball team. Hornbuckle believes that these factors will further solidify Las Vegas as the premier sports and entertainment capital of the world.
MGM Resorts International continues to thrive despite challenges posed by the pandemic, showcasing its ability to adapt and succeed in evolving market conditions.
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