MGM Resorts Warns of Nearly 30% Drop in First-Quarter Revenue

Casino and hotel operator MGM Resorts International warns of a nearly 30% drop in its first-quarter revenue.
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Casino and hotel operator MGM Resorts International  (MGM) - Get Report, reeling from the impact of the coronavirus pandemic  shutdown, on Thursday warned of a nearly 30% drop in its first-quarter revenue compared with a year earlier.

Shares were of the Las Vegas company at last check were up 4% to $13.82.

MGM Resorts said in a regulatory filing that its preliminary expectation for first-quarter consolidated revenue was $2.3 billion. That's down 29% from the year-earlier period and short of the FactSet consensus estimate of $2.48 billion.

Net revenue at the Las Vegas Strip resorts is expected to total $1.1 billion, the filing said, a 21% decrease from a year ago. Net revenue at MGM China is expected to total $272 million, a 63% decline.

MGM is scheduled to report earnings on April 30.

"The spread of and developments surrounding the global pandemic have had, and we expect will continue to have, a significant impact on our business, results of operations and financial condition," the company said in a filing.

Separately, MGM said it proposed to offer $500 million of senior notes due 2025 "for general corporate purposes, including, without limitation, further increasing its liquidity position."

On Wednesday, Las Vegas Sands  (LVS) - Get Report reported a $51 million first-quarter loss after the world’s largest casino company said it was hammered by the coronavirus. 

Last week, Las Vegas Sands suspended its dividend. The company has shut its casinos in the U.S. and Singapore, and limited its activity in Macau.

Shares of Las Vegas Sands were climbing 11% to $45.57 Thursday after executives expressed optimism during an earnings call that its Asia locations would recover faster from the pandemic shutdown than the U.S. properties.

Robert Glen Goldstein, Las Vegas Sands' president, chief operating office and director, said "the idea of wearing a mask or social distancing or thermal - thermometer checks will not be difficult for the customers in local Singaporeans nor Chinese visitors."

"They'll accept it," Goldstein said, according to a transcription of the call. "They'll deal with it. ... Singapore is going to be like Macao, quick to recover, unlike the U.S., which I think is being more drastic and slower. Their ability to acclimate to this environment has been proven in the past. They've lived through SARS. They've lived through swine flu. They've lived for a lot of things and they always come back and they come back much quickly than we anticipate."

Goldstein added that "we feel bullish with the caveat that our foreign business around us, our neighborhood foreign business might be pushed back until the fall and not be there."

"We feel strongly our high-end Chinese business will recover rather quickly," he said. "We know it will because the demand is there."

Wynn Resorts  (WYNN) - Get Report was climbing 7.5%, and shares of Boyd Gaming  (BYD) - Get Report were surging 4.7%.