August 7, 2012
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of casino giant MGM Resorts (NYSE: MGM ) rose 10% today after the company reported earnings.
So what: Revenue rose 29% in the quarter to $2.32 billion on the company's consolidated accounting of MGM China, but fell slightly short of the $2.34 billion analysts expected. The company's loss was also larger than expected at $0.30 per share. Analysts had expected a $0.15-per-share loss.
Now what: The move today was really driven by better-than-expected performance in China and the company's candid outlook for the future. After competitors posted weak results in Macau, MGM said that revenue rose 6% on surprisingly strong traffic. This looks like an earnings miss, but shares had fallen in recent weeks as investors lowered expectations, so in reality the numbers were better than many expected.
The problem for me is that MGM is still losing money hand over fist, and that alone will keep me from getting too excited about the performance of shares today.
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