Analyst hikes earnings estimate for Mirage

A gaming analyst raised his earnings estimates on Mirage Resorts Inc., despite recent warnings from the company that second-quarter earnings will fall well below expectations.

Harry Curtis, senior gaming and lodging analyst with BancBoston Robertson Stephens, raised his 1999 earnings estimate from 70 cents to 72 cents per share, and his 2000 estimate from 90 cents to 95 cents per share. Curtis noted his estimates still fall below the consensus estimate of 89 cents in 1999 and $1.10 in 2000. He maintained his "Long-term Attractive" rating on the stock.

Curtis said his higher estimates reflect improved cash flow at Mirage's newly opened Beau Rivage casino in Biloxi, Miss. Cash flow, also referred to as EBITDA, represents earnings before interest, taxes, depreciation and amortization.

Curtis projected EBITDA from Beau Rivage to rise to $70 million in 2000, with margins rising from 22 percent to 28 percent. Mirage Resorts spent $650 million on the 1,780-room resort.

One week ago, Mirage warned that second-quarter earnings would be between 7 and 10 cents per share, down from 18 cents per share one year ago. Analysts were expecting earnings of 22 cents to 24 cents per share. Mirage blamed lower win at its gaming tables, toughening competition in Las Vegas and heavy spending on the openings of the Bellagio and Beau Rivage.

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