Published Wednesday, April 14, 2010 | 2:20 p.m.
Updated Wednesday, April 14, 2010 | 3:02 p.m.
MGM Mirage today said its first quarter revenue declined, even after the opening of its CityCenter resort complex, and that it expects to report a loss for the quarter.
In disclosing preliminary first quarter results, the Las Vegas-based gaming operator said net revenue is expected to total about $1.46 billion. Not counting certain reimbursements for the company’s management of CityCenter, net revenue is expected to be about $1.36 billion, a decline of 4 percent from the year-ago quarter.
Reflecting continued weakness in the Las Vegas tourism industry related to the recession and additional room capacity in the city, MGM Mirage said revenue per available room from its Las Vegas Strip properties decreased by 8 percent to $94 for the first quarter of 2010 compared to $103 in the first quarter of 2009.
Factoring out special items, MGM Mirage's loss for the quarter totaled 31 cents per share. Published analyst estimates had projected losses of between 21 cents and 22 cents per share -- indicating business for the company has not rebounded as quickly as hoped by the investment community.
Quarterly casino revenue is expected to be down about 5 percent.
The bottom line, MGM Mirage said, it that it expects a first quarter loss per share of approximately 22 cents compared to a profit of 38 cents per share in the prior-year first quarter.
The current-year results include a gain on extinguishment of debt of 21 cents per share and a non-cash charge of about $86 million, or 13 cents per share, representing MGM Mirage’s share of another writedown in the value of CityCenter’s residential inventory of condominiums and condo-hotel rooms.
The 2009 first quarter results included a gain of approximately 44 cents per share from the sale of Treasure Island hotel and casino on the Las Vegas Strip.
Operating loss for the first quarter of 2010 is expected to be about $11 million vs. an operating profit of $355 million in the 2009 quarter.
CityCenter is expected to report an operating loss of $255 million in the first quarter of 2010, which includes an approximately $171 million non-cash impairment charge related to its residential inventory, a non-cash depreciation expense of $69 million and preopening expenses of $6 million. CityCenter results benefited from revenue of $24 million related to forfeited residential deposits.
Aria reported an operating loss of $66 million, which included deprecation expense of $54 million. Occupancy percentage at Aria was 63 percent with an average daily rate of $194.
MGM Grand Macau operating income is expected to be $49 million in the first quarter of 2010, which included depreciation expense of $22 million, a significant improvement compared to an operating loss of $5 million in the 2009 first quarter, which included depreciation expense of $21 million.
Also today, MGM Mirage announced that it proposes to offer, subject to market and other conditions, up to $750 million in notes in a private placement and will use the cash from the debt offering to repay part of its existing debt.