Another Hot Hand for MGM Mirage
By
Jeff Hwang
February 1, 2005
|
It's been the same story all year. The gaming business is on fire, and it all starts with Las Vegas. This morning, MGM Mirage (NYSE: MGG) -- the best all-around player on the Las Vegas Strip -- posted yet another strong quarter of growth.
Fourth-quarter revenues rose 11% to $1.06 billion, driving earnings before interest, taxes, depreciation, and amortization (EBITDA) up 20% to $354 million, for a healthy 33% EBITDA margin. On an adjusted basis, earnings jumped 42%, to $0.51 per share, and clocked in at $0.47 per share under GAAP (generally accepted accounting principles) guidelines.
The gains came across the company's range of operations, with EBITDA climbing 37% at both the flagship Bellagio and New York-New York properties on the Vegas Strip. Only MGM Grand Detroit and The Mirage on the Strip showed EBITDA declines.
Overall, casino revenues were up 10%, as slot revenues showed a 9% gain and table games were up 12%. The hotel business also continued to shine, as occupancy rates and room rates both climbed. As a result, revenue per available room (RevPAR) jumped 12% in the fourth quarter and was up 13% at the Vegas properties alone.
Expecting that the good times will continue, MGM Mirage expects said it was comfortable with the analyst earnings estimate of $0.74 per share for the current first quarter. The company also expects RevPAR growth of 10% over last year's first quarter.
The action on the Las Vegas Strip looks to get even hotter, with the introduction this spring of Wynn Resorts' (Nasdaq: WYNN) Wynn Las Vegas hotel and casino. MGM Mirage is already the best all-around player up and down the Strip, and it will only improve its position with the acquisition of Mandalay Resort Group (NYSE: MBG) later this year.
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Fool contributor Jeff Hwang owns none of the companies mentioned in this story.
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