MGM Revenues Rise But Profits Fall, Boyd Earnings Show Resurgent Locals Market
Posted on: July 28, 2017, 05:00h.
Last updated on: July 28, 2017, 04:56h.
MGM Resorts intends to focus on efficiency and profitability in coming months, CEO Jim Murren told investors Thursday, during the company’s earnings call, after reporting Q2 results that showed major revenue increases, but also significant earnings decreases.
MGM reported that revenue rose 16.3 percent to $2.64 billion for Q2 2017, much of which was attributed to the performance of its new National Harbor property, in Maryland, just across the Potomac River from Washington DC.
Opened in late 2016, the casino “couldn’t be doing better,” Murren said. Already the best-performing casino in Maryland by far, MGM National Harbor contributed net revenue of $177.8 million to MGM’s total Q2 haul, which would’ve ranked it fourth out of the company’s nine Nevada casinos, the Las Vegas Review-Journal noted.
Still, earnings fell 53 percent to $241.6 million, compared with Q2 2016, a fact that prompted Murren to emphasize that the company would be focusing on efficiency and profit margins in coming months.
He noted that one big profit driver expected in the second half of 2017 will be the Floyd Mayweather-Connor McGregor fight, scheduled for August 26 at T-Mobile Arena, which MGM partly owns.
“This could be the second biggest fight of all time and it will certainly drive millions of people to watch Las Vegas, watch T-Mobile, and watch Mayweather and McGregor,” Murren said.
Murren said the company will open its new MGM Cotai “within two to three months,” while the MGM Springfield in Massachusetts remains on schedule for completion in mid-2018.
The Borgata Atlantic City was also a big contributor to MGM’s revenue in Q2, generating $209.4 million. MGM took over ownership of the property in 2016 when it bought out a 50-50 partnership with Boyd Gaming for $900 million.
Best Locals Market in Nearly 10 Years
Speaking of Boyd, efforts to return the company’s focus back to its Las Vegas home base also seems to be paying off. Boyd Gaming President and CEO Kevin Smith was also speaking to investors on his company’s earnings call Thursday. And on it, he toasted the best Q2 results for its Las Vegas locals market in almost a decade.
Boyd’s, which owns the Suncoast, Gold Coast, Sam’s Town, the Orleans, and other off-Strip casinos in Las Vegas, reported earnings of $48.6 million on $599.9 million in revenue for the quarter. Both numbers were up significantly compared to last year’s reported Q2 earnings of $30 million on $544.9 million in revenue.
“Strong performances continued throughout our operations during the second quarter, reinforcing our confidence in the long-term direction of our company,” Smith said.
Smith said these results were “driven by ongoing improvements to our operations and a strong regional economy. Our three newly acquired Nevada properties delivered another great quarter, as we continued to successfully execute on growth and synergy opportunities.”
Boyd’s went on something of a splurge last year, acquiring the Aliante and Cannery Casino Hotels in North Las Vegas, and the Eastside Cannery Casino Hotel in the eastern part of the Las Vegas Valley.
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