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MGM Mirage Profit Dips, Beats Views

MGM Mirage benefits from the Treasure Island casino sale but sees revenue drop 20%.

MGM Mirage's

(MGM) - Get MGM Resorts International Report

first-quarter earnings were slightly down from last year thanks to a property sale, but the casino company saw revenue drop 20%.

Shares were up 88 cents, or 9.3% to $10.32 in after-hours trading.

MGM made $105.2 million, or 38 cents a share, compared with $118.3 million, or 40 cents a share, in the year-ago period. Net revenue fell to $1.5 billion.

The results include a gain of 44 cents, net of tax, related to the sale of the Treasure Island hotel and casino. Analysts polled by Thomson Reuters, who usually exclude one-time items, expected a 7-cent loss on revenue of $1.58 billion.

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The Las Vegas-based company said revenue was negatively impacted by convention cancellations, particularly in January and February and at the Las Vegas Strip resorts -- "and a continued decline in discretionary spending due to the weakened economy."

Occupancy at the company's Las Vegas Strip resorts was "unusually low" in January, improved in February, and returned to a normalized level of approximately 95% in March. The convention cancellations forced the company to shift hotel business to the leisure segment at lower room rates, it said. Las Vegas Strip revenue per available room decreased by 34% to $102 year over year.

"While we experienced significant group cancellations early in the quarter and experienced a continuation of negative consumer spending trends from the fourth quarter, cancellations have tapered off and we see signs that business levels seem to be stabilizing," said Jim Murren, MGM Mirage Chairman and chief executive officer," in Monday's earnings release. "Our resorts have seen sequential increases in occupancy levels through the first quarter and into April, and our forward booking pace is improving," Murren said.

"This is allowing us the opportunity to better yield our room pricing. Additionally, world-class events at our resorts continue to drive revenue and we have an exceptionally strong event calendar in the second and third quarters, with recent events such as the

Manny Pacquiao vs.

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a KO by Pacquiao; and numerous other premier concerts and events in the summer months."