NEW YORK (TheStreet) -- Shares of Melco Crown Entertainment (MPEL - Get Report) fell 1.87% to $26.81 in after-hours trading on Tuesday after Macau gaming revenue fell in August, the third straight month of decline.
Macau gaming revenue dropped 6.1% year-over-year as China cracks down on corruption and declining Chinese housing prices reduced demand from rich VIP customers, according to Reuters.
Gambling revenue from Macau's 35 casinos fell last month to 28.9 billion patacas, or $3.6 billion, compared to 30.7 billion patacas in the same period one year earlier. Analysts expected a 2% to 6% decline.
- The debt-to-equity ratio is somewhat low, currently at 0.68, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, MPEL has a quick ratio of 2.42, which demonstrates the ability of the company to cover short-term liquidity needs.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, MELCO CROWN ENTMT LTD has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- MELCO CROWN ENTMT LTD's earnings per share declined by 21.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MELCO CROWN ENTMT LTD increased its bottom line by earning $1.15 versus $0.76 in the prior year. This year, the market expects an improvement in earnings ($1.45 versus $1.15).
- MPEL, with its decline in revenue, slightly underperformed the industry average of 5.5%. Since the same quarter one year prior, revenues slightly dropped by 7.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: MPEL Ratings Report