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Investors are regaining their interest in casino and hotel companies now as they sense that the economy is turning around. But it will take some more time for major casino and hotel companies to positively surprise investors. Wynn Resorts earnings were weak although there was a hint of turning around. Wynn Resorts' earnings announcement is followed by MGM Mirage.
MGM Mirage (MGM: 11.73, -0.35), one of the world's leading and most respected companies with significant holdings in gaming, hospitality and entertainment, is scheduled report its fiscal third quarter 2009 financial results on Thursday, November 5, 2009. In the last four quarters, the company disappointed investors by reporting significantly lower earnings compared to the market's consensus.
MGM Mirage previously reported revenue of $1,494 million and net loss of $212.6 million, or diluted loss per share of $0.6, compared to revenue of $1,895.7 million and net income of $113.1 million, or diluted income per share of $0.4, in Q2 2008.
Analysts' estimates for the quarter ending September 2009 (Q3) range from a low of $-0.224 to a high of $0, with a consensus of $-0.072. For the fiscal quarter ending September 2009, the consensus EPS forecast has remained the same over the past week at $-0.072 and increased over the past month from $-0.075 to $-0.072 (4.00%). Of the 19 analysts making quarterly forecasts, 2 raised and 1 lowered their forecast.
The third quarter 2009 earnings will be impacted by pre-tax non-cash impairment charge of approximately $955 million related to MGM's investment in CityCenter. In addition, CityCenter, the company's 50/50 joint venture with Infinity World Development Corp, is expected to recognize $348 million non-cash impairment charge related to its residential real estate under development. MGM MIRAGE will recognize 50% of such impairment charge, adjusted by certain basis differences, as a part of its income (loss) from unconsolidated affiliates for the third quarter of 2009. The net pre-tax impact of the CityCenter residential charge to the Company's third quarter operating results is expected to be approximately $200 million.
For the fiscal year ending December 2009, the consensus EPS forecast has remained the same over the past week at $-0.311 and remained the same over the past month at -$0.311. Of the 9 analysts making yearly forecasts, 1 raised and 1 lowered their forecast.
A one-and-a-half year slide in Las Vegas gambling revenue has hurt MGM Mirage and its shares. The company's stock closed Monday at $9.03, compared to the 52 week range of $1.81 and $17.3. The stock seems to be trading at appropriate levels.
Source: iStock Analysis
