Published Wednesday, Nov. 8, 2017 | 8:10 a.m.
Updated Wednesday, Nov. 8, 2017 | 10:31 a.m.
MGM Resorts International, a global entertainment company with 27 unique hotel offerings, reported its third-quarter earnings Wednesday.
Company: MGM Resorts International (NYSE: MGM)
Revenue: Revenues for MGM for the third quarter of 2017 (less promotional allowances) were $2.8 billion, compared to $2.5 for the same period last year.
Income:Net income of $149 million for the third quarter of 2017, compared to $535 million for the same period last year, which included a $430 million gain on the Borgata acquisition.
Income per share: Third-quarter diluted earnings per share were $0.26, compared to $0.93 for the same quarter last year.
The Route 91 Harvest Festival shooting on Oct. 1, along with construction at Monte Carlo, will cause revenue on the Strip for MGM Resorts International to drop, said MGM CEO Jim Murren in a conference call to discuss third-quarter earnings Wednesday.
The call is a chance for analysts to not only ask about the third quarter, which ended Sept. 30, but also about the company’s future projections and the fourth quarter, the start of which of course, was marked by the shooting.
“Looking ahead, obviously the events of Oct 1. has had an impact on the fourth quarter,” Murren said. “The entire town did the right thing. We all took a pause in our marketing out of respect for (the incident).”
As a result, Murren said, MGM saw a spike in non-group cancellations double what the company would normally see for that time of year.
Murren added that bookings returned to normal levels almost immediately after MGM restarted its marketing efforts at all its properties, except for Mandalay Bay.
“Mandalay Bay was the lone exception,” Murren said. “We felt it was appropriate to turn on their marketing later at a slower pace.”
Murren said the shooting will have an impact on the larger company’s revenue and profitability because the fourth quarter, and October specifically, are very strong for MGM.
At the Monte Carlo, Murren said the transformation has disrupted business more than he had expected.
“I underestimated the impact of the disruption of the Monte Carlo,” he said. ”It has been incredibly disruptive to the employees and guests. The building has been under the most comprehensive renovation of any property that we’ve ever had.”
MGM is in the midst of changing the Monte Carlo into two brands: Park MGM and NoMad.
Park MGM will be a luxury hotel tied thematically to MGM’s outdoor space The Park just to the south. NoMad will be a separate, smaller hotel with 292 guestrooms and suites, its own lobby, swimming pool, casino and restaurants.
Once the change is complete, Murren predicted, the property will do very well.
“We’re taking a property that’s well positioned geographically but poorly positioned in the market (and improving it). I would expect very high returns and think the Monte Carlo cash flows after being integrated with the Park MGM will double.”
Murren and other executives also said the near-term outlook for conventions at MGM properties is good.
However, the company will see a dip in convention business the first quarter of 2018 (compared to this year) because the large construction trade show CONEXPO-CON/AGG that was held in January won’t be back in Las Vegas until 2020.