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MGM Earnings: An Early Look

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Earnings season is in full swing, with huge numbers of companies having already given their latest numbers to investors, and MGM Resorts (NYSE: MGM  ) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

The casino industry has become a global business, with major growth in Asia having taken away the industry's former focus on Las Vegas. MGM is still fighting to take full advantage of that shift. Let's take an early look at what's been happening with MGM Resorts over the past quarter and what we're likely to see in its quarterly report on Wednesday.

Stats on MGM Resorts

Analyst EPS Estimate


Year-Ago EPS


Revenue Estimate

$2.31 billion

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Will MGM Resorts be a winning bet for investors this quarter?
Despite the red ink, analysts have actually gotten more bullish on MGM over the past few months. Although they've only raised estimates for the just-ended quarter by a penny, they've dramatically narrowed their loss expectations for full-year 2013 by $0.20 per share. That optimism has helped lead an advance of more than 35% for the stock since mid-November.

Gaming stocks have been red-hot lately, and the major driver has been international growth. After fears of a slowdown in Macau, signs that Chinese economic growth may finally be coming back have boosted shares of MGM as well as Macau peers Las Vegas Sands (NYSE: LVS  ) and Wynn Resorts (NASDAQ: WYNN  ) . Macau-centered Melco Crown (NASDAQ: MPEL  ) has more than doubled in just the past six months on excitement about Asia. Yet with further Macau expansion efforts from Sands and Wynn still years away, the recent run may be getting ahead of itself.

Fortunately for MGM, Las Vegas has been coming back as a gaming destination. During December, gaming revenue rose 13%, helping both MGM and Caesars Entertainment (NASDAQ: CZR  ) . With Caesars heavily in debt and having huge exposure to U.S. markets both in Las Vegas and throughout the country, domestic strength is essential for its success, and MGM also stands to benefit disproportionately from favorable U.S. trends compared with its more international peers.

In its quarterly report, MGM needs to elaborate on its international operations and the status of efforts to compete in Macau and elsewhere around the world. With its major rivals showing no signs of slowing down their expansion efforts, MGM can't afford to let up, despite its debt-heavy financial condition. Also look for management's comments on the recent crackdown on Macau junket operators, on which both Wynn and MGM rely to a large extent for traffic.

Stay on top of MGM
Get the entire story about MGM's past and its promising future by reading our premium research report on the casino company. Inside, our top gaming analyst looks at whether MGM makes a smart buy right now, evaluating its Asian and U.S. prospects. As a bonus, you'll receive a full year of key updates and guidance as news develops, so don't miss out -- simply click here now to claim your copy today.

Click here to add MGM Resorts to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

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Related Tickers

9/30/2016 2:28 PM
MGM $26.15 Up +0.30 +1.16%
MGM Resorts Intern… CAPS Rating: ***
CZR $7.46 Up +0.06 +0.81%
Caesars Entertainm… CAPS Rating: *
LVS $57.68 Up +0.75 +1.32%
Las Vegas Sands CAPS Rating: ****
MPEL $16.05 Up +0.03 +0.19%
Melco Crown Entert… CAPS Rating: *****
WYNN $97.52 Down -3.07 -3.05%
Wynn Resorts CAPS Rating: ****