Since the casino industry in the world's biggest gambling enclaves is essentially shut down because of the SARS-CoV-2 coronavirus, few investors expected a standout quarter from one of the sector's mainstays, MGM Resorts International (NYSE:MGM). So they weren't terribly disappointed with the steep declines the company recorded in its Q1 of fiscal 2020 results, released after market close on Thursday.
The quarter saw a 29% year-over-year drop in revenue for MGM, to $2.3 billion. GAAP net profit ballooned to $807 million ($1.64 per share) from the Q1 2019 figure of $31 million, although that gain was due to its take from a pair of real estate divestments that closed during the quarter.
In January, MGM agreed to sell its MGM Grand Las Vegas and its Mandalay Bay resorts to a joint venture controlled by the similarly named though independent real estate investment trust (REIT) MGM Growth Properties and Blackstone Real Estate Income Trust. This took the form of a sale-leaseback transaction valued at nearly $4.6 billion.
Stripping that and other one-off items out of profitability, the company's non-GAAP adjusted net loss was $0.45 per share. The Q1 2019 result was a profit of $0.14.
On average, analysts tracking the stock were estimating $2.45 billion on the top line and an adjusted per-share net loss of $0.15.
In after-market action following the release of the quarterly figures, MGM's shares were down, but not precipitously. They were off by 3.7%, a deeper decline than that suffered by numerous consumer goods stocks on the day, not to mention the wider equities market.