Updated from September 2
Mandalay Resort Group (MBG) were flat Friday after the company late Thursday said strong results at its core Las Vegas operations drove second-quarter earnings sharply higher from a year ago.
The hotel and casino operator said after the bell Thursday that it posted second-quarter net income of $58.2 million, or 85 cents a share, up from the $42.3 million, or 67 cents a share, it had in the year-ago quarter.
Second-quarter results were hurt by a 20% increase in health care costs, lower table win at its Mandalay Bay flagship in Las Vegas, as well as a drop in business travel, the company said."Despite the absence of a strong convention component for this quarter, Mandalay still performed impressively, delivering all-time record results for its second quarter by a distance," noted Glenn Schaeffer, the company's president and CFO. The company's quarter includes a number of items, so Wall Street's estimate of a second-quarter profit of $1.03 a share is not immediately comparable with the 85 cents Mandalay earned. The casino operator generated $713.8 million in revenue during the quarter, topping the $702.5 million expected by Wall Street, and up 11% from last year. Shares were down 2 cents at $67.83 early Friday. Mandalay's Las Vegas results were strong, with operating cash flow rising $17.6 million, or 14% from last year. Revenue from properties on the Strip rose 8%, while revenue per available room, also known as revpar, rose 12%. Mandalay Bay, Luxor and Excalibur all reported record results. In mid-June, the merger of MGM, the third-largest U.S. gaming company, and Mandalay, the fourth-largest, was unanimously approved by the boards of both companies. Under the terms of the deal, MGM bought Mandalay for $4.8 billion in cash, or $71 a share, with the assumption of $2.5 million in debt and $600 million in convertible debentures. While the deal must clear a number of regulatory hurdles, MGM said it expects the transaction to be completed by the end of the first quarter of 2005.