MGM Resorts International Second-Quarter Sales Jump on Stronger Growth in China

MGM Resorts International (MGM), a hospitality and entertainment firm, reported late on Thursday mixed second-quarter results, with sales beating analysts’ average forecast due in part to strong growth in China while earnings lagged the Street’s view.

The firm, whose brands include The Mirage and Bellagio, said in its earnings statement that net sales jumped by 12.8% to $3.22 billion during the three months that ended June 30, from $2.86 billion a year earlier and slightly ahead of the $3.21 billion average analyst estimate compiled by Capital IQ.

Higher group turnover followed a 26% surge in Chinese sales to $706 million. Also, the firm noted that growth in sales at its Las Vegas Strip Resorts coupled with higher non-gaming sales offset a 12% drop in gaming turnover.

Adjusted earnings, however, fell to $0.23 per share from $0.26 per share a year ago and although the company said its quarterly results were “in-line” with its expectations the drop in net income lagged the $0.26 per share market consensus. Part of the reason for lower earnings was an increase in casino expenses as well as general and administrative costs.

“We feel good about the remainder of 2019, given the strength in our convention bookings and entertainment calendar,” Chief Executive Officer Jim Murren said in the statement. “In addition, we expect MGM 2020 [a plan announced in January to improve operational efficiencies] will be an additional catalyst for second-half earnings growth.”

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