Mandalay Resort Group stock falls after earnings report

The announcement, released after the close of trading Wednesday, triggered the fall of Mandalay stock to $15.31 a share, down $3.94.

This comes on the heels of Mandalay recording a 78 percent increase in its stock price in 1999.

Securities analysts and Mandalay executives differed over the breadth of the problems causing the expected earnings shortfall.

Some analysts, noting the company had insisted in the weeks leading up to the New Year that its earnings were on track, cut their ratings on Mandalay stock.

Mandalay President Glenn Schaeffer said results for the quarter ending Jan. 31 were hurt by a lack of visitors to Las Vegas during the holiday weekend, traditionally one of the strongest of the year for casino operators.

"The vital part of our quarter is the holiday period, and it was sub-normal," Schaeffer said. "We have about 30 percent of the room inventory on the Strip and we're principally a room-rate and slot-machine company."

Mandalay's announcement said the company would report net income below the 16 cents a share it earned in last year's final quarter, but Schaeffer declined to estimate what the final number might be.

The year-over-year quarterly decline comes even though Mandalay Bay - the 3,700-room megaresort that opened last March - didn't contribute to the 1998 fourth quarter results.

Salomon Smith Barney analyst Michael Rietbrock cut his rating on Mandalay stock, saying the company's problems "may prove to be more than a one-quarter issue."

"Though Mandalay Bay is an attractive property, its casino revenue has been softer than expected for a property of its stature," he said. "Because the company has never historically had gaming product that catered to the high end of the market, we believe that it will take some time to build an appropriate customer base for the property."

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