Melco Crown's Building Dreams on the Cotai Strip

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Melco Crown (Nasdaq: MPEL  ) leaned on the City of Dreams Casino to answer the dreams of investors in the third quarter, delivering results that surprised almost everyone.

At the Cotai Strip casino, located across from Las Vegas Sands' (NYSE: LVS  ) Ventenian Macau, revenue grew 75.2% to $504.0 million, and property EBITDA grew to $114.9 million. This EBITDA margin of 22.8% still lags behind Las Vegas Sands and Wynn Resorts (Nasdaq: WYNN  ) in Macau, but at least it's trending in the right direction.

Overall, Melco reported revenue of $727.0 million, up 45% from last year, adjusted EBITDA of $136.3 million, and net income of $15.8 million, or $0.03 per American depositary share.

Room rates were a little concerning at Melco Crown, however. Altira's average daily rate declined from $215 to $161, which isn't a huge surprise given gamblers' move toward the Cotai Strip. What was surprising is that City of Dreams' average daily rate fell from $166 to $158, and occupancy reached just 77%. Apparently, people love to gamble at City of Dreams but would rather stay at The Venetian, where room rates are rising and occupancy is up.

Melco Crown's quarter was a step in the right direction, but it looks as if Melco is riding success on the Cotai Strip instead of taking share on its own. That may continue as Las Vegas Sands opens Sites 5&6 next to City of Dreams. Still, I would like to see room rates go up instead of down, especially on the Cotai Strip where Las Vegas Sands is seeing improving room comps.

I think Las Vegas Sands and Wynn Resorts are better operators, but Melco will be able to keep putting up big numbers just by virtue of being in the right location in Macau. As they say in real estate, it's all about location, location, location.

What do you think about Melco Crown? Leave your thoughts in the comments section below or add it to My Watchlist, which will find all of our Foolish analysis on this stock.

For more Foolishness:

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his Motley Fool CAPS picks at TMFFlushDraw.

Melco Crown Entertainment is a Motley Fool Global Gains choice. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (11)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1358058, ~/Articles/ArticleHandler.aspx, 10/25/2016 6:32:31 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 9 hours ago Sponsored by:
DOW 18,223.03 77.32 0.43%
S&P 500 2,151.33 10.17 0.47%
NASD 5,309.83 52.43 1.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/24/2016 4:02 PM
LVS $57.95 Up +0.79 +1.38%
Las Vegas Sands CAPS Rating: ****
MPEL $16.70 Up +0.33 +2.02%
Melco Crown Entert… CAPS Rating: ****
WYNN $96.80 Up +1.53 +1.61%
Wynn Resorts CAPS Rating: ****