Updated from Dec. 2
Mandalay Resort Group (MBG) shares edged higher early Friday after the casino company late Thursday reported strong profit growth for its third quarter, citing booming business at its Las Vegas casinos.
The Las Vegas-based company reported net income of $67.1 million, or 99 cents a share, in the quarter ended Oct. 31, up 65% from $40.6 million, or 63 cents a share, a year earlier.
Shares rose 31 cents, or 0.4%, to $70 in premarket trading.The company said recurring earnings, not including one-time items, were $1.04 a share, crushing the average Wall Street analyst estimate of 88 cents. Items included a gain of $8.2 million, or 8 cents a share, from an accounting change related to the company's jackpot reserves; merger-related costs of $6.6 million, or 10 cents a share; and a charge of $3.4 million, or 3 cents a share, related to the amortization of deferred income. Results were also affected by higher health care costs. Revenue was $720.3 million, up from $625.6 million a year earlier, better than the $691.4 million average analyst expectation from Thomson First Call. Hotel and game revenue grew strongly at the company's Las Vegas Strip resorts. Revenue per available room, a key metric known as revpar, grew 18% at those properties, while casino revenue rose 14%. "All of the company's Strip properties, including the Monte Carlo, reported record third-quarter results, with the third quarter marking the sixth consecutive quarter of double-digit percentage increases," said Glenn Schaeffer, the company's CFO. The company has agreed to be acquired by MGM Mirage (MGG) for $4.8 billion in cash. MGM expects to complete the acquisition by the end of next year's first quarter. In a conference call, Mandalay executives declined to comment on the merger.