MGM said after the bell on Wednesday that it now expects to lose $96.7 million, or 22 cents a share, during the quarter, hurt by write-downs related to its newest CityCenter development. Analysts were looking for a loss of 21 cents a share. MGM reported a profit of $105.2 million, or 38 cents a share, in the year-ago period.
The company also said that it expects revenue of about $1.46 billion.
"We believe MGM is now in the process of 'right-sizing' CityCenter, as the property's brand awareness rises, and the economy continues to potentially strengthen," Sterne Agee analyst David Bain wrote in a note.
The biggest concern is the performance of MGM's Las Vegas Strip assets, KeyBanc analyst Dennis Forst, wrote in a note. "The nine wholly owned properties generated $205 million in EBITDA versus $283 million in the first quarter of 2009 and our $251 million estimate. Every property was down year-over-year and missed our forecasts."
As a result, shares of the company are tumbling 5.3% to $14.60 in early trading. The trend is also bringing down rivals like
Las Vegas Sands
, which is falling 0.8% to $23.80,
, which is off 1.5% to $11.92, and
Isle of Capri Casinos
, which is declining 0.5% to $11.
, which saw its price target raised to $60 from $45 by KeyBanc, is essentially flat, changing hands at $86.37.
Melco Crown Entertainment
was also cut to neutral by Credit Suisse. Still, the firm upped its price target on the stock to $5.60 from $5.25.
Shares of the casino, which is based in Macau, are tumbling 5% to $4.90.
-- Reported by Jeanine Poggi in New York.
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