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MGM Resorts reports increased second-quarter earnings

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Mikayla Whitmore

The exterior of The MGM Grand seen from Rivea at Delano Las Vegas on Feb. 2, 2016.

Thu, Jul 27, 2017 (noon)

MGM Resorts International, the casino giant whose Strip properties include Bellagio, MGM Grand and Aria, reported its second-quarter earnings today.

Company: MGM Resorts International (NYSE: MGM)

Revenue: Net revenue was $ 2.6 billion for the second quarter 2017, compared to $2.3 billion in the same quarter a year ago.

Income: Net income for second quarter 2017 was $210.6 million compared to $474.4 million for the same quarter of 2016.

Income per share: Earnings per diluted share were $0.36, compared to $0.83 per diluted share in the same quarter last year.

Takeaways:

Executives of MGM International were all superlatives during a conference call and webcast Thursday to discuss the company’s second-quarter earnings.

“We are quite proud of the results we recorded this morning,” MGM CEO Jim Murren said. “We attribute (that) to what we’ve discussed many times before — our focus on margin and profitability, and the hard-working men and women who have brought incredible efficiencies to our company.”

Murren went on to point out that the company has met its corporate guidance (predictions corporations make about possible future performance) and has done better than expected in terms of profitability and margin.

Murren said he expects the next two quarters to also be good at least in part because of upcoming events, including the fight between Floyd Mayweather Jr. and Conor McGregor.

“This could be the second-biggest fight of all time,” Murren said.

Ending his prepared remarks for the call, Murren said the company “believes our best days are ahead of us. What we see today is more confidence in our business than we’ve seen in the last 10 years.”

Later, in response to analysts’ questions, Murren spoke about the possibility of some big resort deals happening soon, some nationally involving its affiliated real estate division MGM Growth Properties (MGP), some in Las Vegas involving MGM International and others involving non-MGM companies and properties.

MGP has first right to make an offer for MGM National Harbor, the resort recently opened near Washington, D.C., currently owned and operated by MGM International, as well as MGM Springfield, a resort the company is building in Springfield, Mass.

Murren said it’s probably time for MGP to start considering the purchase of National Harbor, and he also said MGP could be in the market for other non-MGM opportunities.

Murren also said MGM International would consider selling assets it owns in Las Vegas. “The other lever we have (to drive cash flow) is through asset sales,” Murren said. “There’s been a significant level of interest there as well.”

Murren reminded the analysts that MGM has sold other assets such as Crystals at CityCenter and said a sale of Circus Circus and the Mandarin Oriental at CityCenter (which MGM owns but is operated by the Mandarin Oriental Hotel Group) could also be possible.

An MGM spokesperson later clarified that the company is not actively marketing a sale.

In the midst of talking about MGM deals, Murren said he had heard “strong chatter around the Fontainbleau being sold with a hotel flag being put on it.”

And while MGM was not involved in that transaction, Murren said the potential sale is a good sign for the health of Las Vegas and the north end of the Strip in particular.

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