While MGM Mirage
The Vegas Strip giant's revenues climbed 6% to $1.04 billion, boosting property EBITDA (earnings before interest, taxes, depreciation, and amortization) 20% to $348 million. The property EBITDA margin of 34% represents the company's highest third-quarter margin since the 2000 merger between MGM Grand and Mirage Resorts. Meanwhile, adjusted earnings from continuing operations soared 68% to $0.57 per share.
With the exception of The Mirage on the Las Vegas Strip, there were gains across the board. Casino revenue, accounting for 52.2% of net revenue, increased 5% over last year, driven primarily by a 9% increase in slot revenues.
Non-casino revenue rose 7% from last year, with hotel revenue up 8%. Company-wide RevPAR (revenue per available room) increased 9% to $117, as the daily room rate jumped to $125 from $116 last year and the occupancy rate edged up to 93% from 92%. RevPAR at the Las Vegas Strip properties alone grew 10% to an impressive $134.
The third-quarter numbers reflect the continued strength in the gaming industry, particularly in Las Vegas. However, MGM Mirage expects to report adjusted earnings of $0.35 to $0.45 per share in the fourth quarter -- well short of the $0.50-per-share analyst estimate.
MGM Mirage announced that it had received commitments from its lenders to increase its senior credit facility to $7 billion to finance the acquisition of Mandalay. However, with the added debt comes added interest expense -- the primary cause of the weaker forecast. The two companies agreed to the $7.9 billion merger back in June (see Mandalay Says "I Do" and The Logic of MGM-Mandalay), several weeks prior to the merger agreement between Strip rivals Harrah's Entertainment
Despite the weaker-than-expected fourth-quarter forecast, MGM Mirage maintains some of the best brands and the highest-end hotels in the business. All said, it was another solid quarter added to a string of solid quarters for the company.
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Fool contributor Jeff Hwang owns none of the companies mentioned above.