Updated from 8:10 a.m. EDT

Casinos hit the jackpot in the first quarter.

Both MGM Mirage ( MGG) and Harrah's Entertainment ( HET) announced record first-quarter earnings that topped Wall Street estimates by a healthy margin on Wednesday morning, telling investors that results would be strong for the rest of 2004, but declining to issue new guidance.

MGM Mirage announced first-quarter net income of $105.8 million, or 74 cents a share, more than double the $51 million, or 34 cents a share, the casino operator had in the year-ago quarter. On an adjusted earnings basis, which excludes all items, MGM Mirage earned a record 70 cents a share, nearly double the 38 cents a share it had a year ago and well above the 46-cent analyst estimate.

"Our first quarter was satisfying in many regards and we achieved several milestones, including record EPS and EBITDA. This was our most profitable quarter ever, with the highest EBITDA margin since the formation of MGM MIRAGE four years ago," said Terry Lanni, chairman and CEO. "Bellagio and MGM Grand, for example, each had their most profitable quarter ever. We expect to build momentum throughout 2004."

Thanks in part to the strong Las Vegas and Atlantic City results, MGM Mirage's first-quarter revenue came in at $1.07 billion, up 12% from the year-ago $951 million and higher than the $1.02 billion expected by Wall Street. Gaming revenue rose 13% year-over-year while non-gaming revenue rose 11%.

The amount of revenue generated per available room, a key industry metric called revpar, was especially strong, coming in at $124, up 9% from last year. Las Vegas revpar was even stronger, up 11%, as business travelers and convention-goers flock to Sin City.

But while current results set records, MGM Mirage declined to give specific guidance for the rest of the year, unlike Station Casinos ( STN), which rose 3.3% on Tuesday after raising earnings expectations for the year.

MGM did tell investors a recent power outage at the Bellagio would decrease second-quarter earnings by a penny a share, but said it was comfortable with current estimates and said revpar gains would continue -- a good sign for business for the rest of 2004.

"If current trends continue, we expect to produce year-over-year gains in earnings throughout 2004. At this early stage, we believe the current earnings estimate consensus of $0.51 per share for the second quarter of 2004 ... is reasonable," said Jim Murren, president and CFO. "Our current forecast indicates that company-wide revpar for the second quarter will be up approximately 7% over last year, with revpar at our Las Vegas Strip resorts up a vibrant 9%."

Harrah's Optimistic About 2004

Like MGM Mirage, Harrah's raked in record first-quarter earnings, topping Wall Street estimates by a dime, but didn't provide specific guidance for the rest of the year.

The casino operator announced first-quarter net income of $81.7 million, or 73 cents a share, which is marginally better than the $81.1 million, or 73 cents a share, it recorded a year ago. Excluding items, which is how Wall Street views the company, Harrah's earned a record $287.5 million, or 76 cents a share, easily topping the 74 cents it had a year ago and the 66-cent profit expected by analysts.

"Net income exceeded that of the 2003 first quarter despite the impact of gaming-tax rate increases imposed in mid-2003 in several states," said Gary Loveman, Harrah's president and CEO, who credited a new customer loyalty program for boosting same-store revenue 5.8% over last year's quarter.

Harrah's revenue came in at $1.11 billion, up nearly 5% from last year's quarter and also higher than the Wall Street estimate of $1.07 billion. Revenue trends were especially strong in Las Vegas, where Harrah's owns the Rio and Harrah's Las Vegas, with southern Nevada revenue up 13.3% year-over-year. The company also posted record earnings in Atlantic City.

While it declined to give specific earnings guidance, Harrah's management said it was optimistic about earnings going forward.

"We are optimistic about the outlook for the remainder of the year," Loveman said. "Pending regulatory approvals, we expect to close on the previously announced acquisition of Horseshoe Gaming Holding Corp. around midyear, adding three superb properties to our portfolio and giving us control of the Horseshoe brand world."

Shares of Harrah's were recently down 96 cents, or 1.7%, to $54.74, while shares of MGM Mirage had risen 32 cents to $46.47.

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