In the first quarter, MGM's results hit a record high, assisted by their partnership with Marriott in Las Vegas.
In the first three months of 2024, MGM Resorts International (NYSE: MGM) achieved impressive results, beating expectations in earnings per share and revenue. MGM's Las Vegas Strip casino hotels and a recently launched points partnership with Marriott International (NASDAQ: MAR) both played a part in this accomplishment. With earnings per share clocking in at 74 cents on a non-GAAP basis and revenue reaching $4.4 billion, the company managed to surpass the prediction of 58 cents per share and sales of $4.23 billion by analysts.
"We achieved record consolidated revenues in the first quarter," announced MGM CEO Bill Hornbuckle. Referring to their newly launched partnership with Marriott, Hornbuckle mentioned that it has exceeded their initial expectations, with over 130,000 room nights booked. The plan is for this strategic relationship to foster growth this year.
The MGM Collection with Marriott Bonvoy partnership covers MGM's 17 domestic properties, including ones on the Las Vegas Strip and regional casino hotels. By allowing customers to book stays at these sites through Marriott's website, members of the MGM Rewards program can now earn Marriott Bonvoy points.
Vegas Success, Signs of Weakness for Regional Properties
While other operators voiced concerns about Las Vegas, MGM found success, with quarterly revenue rising to $2.3 billion from $2.2 billion the previous year. This increase was attributed to a 4% hike in average daily room rates. Despite this, adjusted earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) slipped to $828 million from $836 million.
On the other hand, MGM's regional properties displayed a hint of instability, mirroring a trend across the industry. The operator reported a 9% drop in same-store adjusted property EBITDAR for these venues, down from $302 million to $274 million.
However, MGM China countered this with remarkable results, recovering from the effects of COVID-19. In the March quarter, net revenue for MGM China saw a 71% growth spurt, reaching $1.1 billion, while adjusted property EBITDA jumped a whopping 78%. MGM owns approximately 56% of the Macau entity.
"The current quarter was positively affected by the continued ramp up of operations after the removal of COVID-19-related travel and entry restrictions in the prior year quarter," mentioned the statement.
MGM's Stock Buyback Trend Continues
Following $377 million in generated free cash flow within the first quarter, MGM continued its penchant for repurchasing its shares. During this period, the company bought back 12 million of its own stocks at enticing valuations.
Business Insider reported that since 2021, the gaming firm has cut its shares outstanding count by 36%, placing it among the top US-based companies with the biggest reductions within that time span in terms of share reductions.
"We repurchased 12 million shares at attractive valuations, providing our shareholders with additional benefits," commented CFO and Treasurer Jonathan Halkyard in the press release.
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Source: www.casino.org
