MGM Resorts International (MGM -0.34%), a key player in the global hospitality and entertainment industry, unveiled its third-quarter results for 2024 on October 30. The company recorded a 5% increase in consolidated net revenue, reaching $4.2 billion, just shy of the $4.211 billion analyst forecast. Adjusted Earnings Per Share (EPS) stood at $0.54, missing the $0.551632 projection and marking a decline from $0.64 in the previous year. Despite the mixed results, a significant uptick was noted in the performance of MGM China and digital ventures, underlining a successful quarter focused on international and digital growth.
| Metric | Q3 2024 Result | Q3 2024 Estimate | Q3 2023 Result | % Change YoY |
|---|---|---|---|---|
| Consolidated Net Revenue | $4.2 billion | $4.211 billion | $4 billion | 5% |
| Adjusted EPS | $0.54 | $0.551632 | $0.64 | -15.6% |
| MGM China Net Revenue | $929 million | - | $815 million | 14% |
| Las Vegas Casino Revenue | $476 million | - | $546 million | -13% |
Source: Analyst estimates for the quarter provided by FactSet.
MGM Resorts International at a Glance
MGM Resorts International is a powerhouse in the hospitality, gaming, and entertainment sectors. The company operates iconic properties such as Bellagio and MGM Grand on the Las Vegas Strip. Focused on luxurious experiences and non-gaming amenities, MGM is expanding its global footprint through integrated resorts.
Recently, the company's strategic focus has been towards an asset-light business model. It reduces ownership of real estate, such as through triple-net leases, allowing capital to be used for growth and shareholder returns. Expansion plans target both international markets, like Japan, and online spaces, particularly through partnerships such as BetMGM.
Quarterly Performance Highlights
This quarter, MGM China's revenues soared by 14% to $929 million due to relaxed post-COVID restrictions. Benefiting from a recovering tourism sector, it achieved a 5% growth in adjusted property EBITDAR -- a measure indicating earnings before interest, taxes, depreciation, amortization, and rent costs. MGM China continues to drive forward the comeback of Macau's gaming sector.
The Las Vegas segment showed a modest 1% rise in net revenues to $2.1 billion. However, casino revenue dipped by 13% amidst competitive pressures and decreased table games performance, partially offset by gains in non-gaming revenues. These dynamics illustrate the evolving landscape of Las Vegas beyond traditional gambling-centric revenue.
The regional operations of MGM recorded a steady 3% revenue increase, totaling $952 million, with slight improvements in casino revenue and EBITDAR. This reflects stable operations outside the Las Vegas Strip, contributing to a balanced revenue mix across the company.
Digital ventures, highlighted by the performance of BetMGM, surged with a nearly 20% increase in revenue. BetMGM's growth is part of its broader digital strategy underscored by recent global partnerships and acquisitions.
MGM repurchased $300 million in shares during Q3, totaling $1.3 billion for the year, effectively reducing shares outstanding by 40% since 2021.
Looking Ahead
Management remains optimistic about growth prospects from digital investments. With ongoing projects in Japan and New York's gaming markets, expansion continues to focus on digital and international developments. However, future hurdles include cybersecurity threats and possible macroeconomic pressures.
Investors are encouraged to watch MGM's movements in the digital market as it capitalizes on new ventures. Forward guidance suggests continued strategic buybacks supported by substantial liquidity and proactive risk management. Expansion in international markets and planned high-profile projects are poised to fortify MGM's long-term standing.
