Analyst hikes forecast for LV operator

Analyst David Anders of Credit Suisse First Boston increased his earnings estimates for Mandalay Resort Group of Las Vegas for 1999 and 2000 from $1.30 and $1.55 per share to $1.34 and $1.71 respectively.

Anders raised his estimates after Mandalay reported second quarter earnings per share from continuing operations of 29 cents, which were in line with expectations. Bad luck at Mandalay table games lowered earnings about 4 cents, Anders estimated.

"The company's second quarter results were driven by the opening of Mandalay Bay in addition to solid second quarter fundamentals in Las Vegas, as evidenced by impressive room rate increases and significant margin expansion attained at all three of Mandalay's existing Las Vegas properties," Anders wrote in a new report on Mandalay.

On the Las Vegas Strip, Mandalay owns Mandalay Bay, Luxor, Excalibur, Circus Circus and 50 percent of Monte Carlo.

Anders said the Fall convention season and Millennium celebrations should generate strong demand for Las Vegas hotel rooms. Mandalay Bay controls about 17,000 rooms on the Strip.

"Room rates in the third quarter continue to increase on a year-over-year basis for low-end properties, while high-end facilities are beginning to post improving results," Anders wrote.

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