Melco Soothes Credit Concerns
Editor's note: "Bricks and Mortar" is a series of columns written by real estate reporter Nicholas Yulico meant to help TheStreet.com readers generate real estate and gaming-related stock ideas.
Melco PBL (MPEL) shares jumped 13% Friday after being slammed earlier this week, when rumors of a problem with the Macau casino owner's credit facility weighed on the stock.
Melco's second-quarter results, released Friday, were weak, as expected, because of the delayed opening of VIP game rooms at the company's first casino, Crown Macau.
However, the company -- which I've picked as a buy for my Bricks and Mortar mock portfolio -- reported positive July and August trends for the Crown, and management did its best to soothe investors about the credit facility fears.Melco said average daily VIP rolling chip volume -- a key Macau operating statistic -- was $20 million in the second quarter. The volume more than doubled to $44 million in July and has improved another 25% to $55 million since the beginning of August. For the second quarter, Melco reported a loss of $69.2 million, or 6 cents a share, widened a loss of $5.2 million, or 1 cent a share, a year earlier. Heavy property-related expenses dragged down results. The period marked the first quarter that included any casino results, since the Crown property opened in May. Thus revenue for the quarter soared to $45.1 million from $5.5 million a year earlier. Melco said Crown's market share of total gaming revenue in Macau was 1.7% in May, 2.7% in June, and 4.9% in July. In August, the share rose to 7%, management said on the company's conference call.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV