Two Way Hard Three | Las Vegas Casino & Design Blog

November 2, 2006

MGM Mirage Beats Expectations

Posted by detroit1051

MGM earned $.54 in Q3. Analysts had forecast $.41.
Revenues were up 5% to a new record of $1.9 Billion
A Winning Hand at MGM Mirage
A few notes from the conference call follow the jump.


MGM's Quarterly calls are always impressive. Terry Lanni and Jim Murren consistently speak knowledgeably and clearly. Bobby Baldwin, head of Mirage Resorts, doesn't come across as confidently, but his record, previously with Wynn and now with MGM, speaks for itself. MGM is an impressive operator.
Casino revenue was up 5%.Lanni said slot revenue at Bellagio was up 15%, 17% at TI and 12% at MGM Grand. He gave credit to the power of the Players Club. This may explain why my slot offers from Bellagio aren't as good as in the past. They have bigger players to court.
Baccarat is booming with revenue up 22%. Lanni said all high-end table games were strong, and he speculated that business owners and executives are doing well now and are spending more in casinos. He added that MGM expects this strong trend to continue through both the western New Year and the Chinese New Year. Very bullish!
MGM no longer breaks out all individual property stats, but Lanni/Murren/Baldwin (I couldn't keep track of who said what) said EBITDA at some properties set records. Bellagio's was $98 Million which set a new record, up 39% over last year. The Mirage hit $70 Million, the best in seven years, and its hotel revenue was the highest in history. Murren and Baldwin gave a lot of credit for The Mirage's improvement to the new casino floor, new restaurants and clubs, and the new Cirque Beatles show, "Love." I believe they said Revolution ultralounge will open December 15.
The were proud of the way they re-opened Beau Rivage on schedule on the first anniversary of Hurricane Katrina. EBITDA was $14.8 Million for 33 days compared to $12.4 Million for last year's 59 day Quarter, shortened by Katrina. The retail street of shops opened last week, and the remaining restaurants will open before New Year's.
MGM Grand had EBITDA of $83.6 Million, also a record.The three MGM Grand Signature towers brought in profits of $26, $70 and $80 Million. Sales per sq ft started out at $788 in Tower 1 and in Tower 3 is $1,067. Unreal! By the way, in answer to an analyst's question, they said they're planning on about the same from all the condos/condo hotel units in CityCenter, $1,067 sq ft.
They seemed pleased with their planning for CityCenter which enabled them to lock in materials, contractors, etc and will complete the project on time, on budget. The CityCenter's preview center in Bellagio is giving them 500 prospects a week. A similar center will open in The Mirage, and the grand opening of the big permanent sales center on the Strip between NYNY and Monte Carlo will be the first week of January.
I can't read my notes, but Mandalay Bay and Luxor did well in the Quarter as did MGM Grand Detroit. The permanent Detroit casino/hotel will open in Q2 '07. Slot revenue in Detroit was up 11%, another record.

The mid-market properties of Circus and Excalibur are doing well because there are fewer properties attracting budget-minded guests. Also, lower gas prices are favorable to these properties for drive-in customers.
I'm not familiar with the I-15 construction, but Lanni said it's not adversely affecting their customers driving in from California.
Not much on Macau other than MGM Grand Macau will open toward the end of '07.
An analyst asked about plans for Atlantic City. Lanni said they may have plans to discuss next year. They have 71 acres near Borgata which they will develop as a "CityCenter East" and will not partner with anyone.
End of my notes.

Categories: Business of Gaming, MGM Resorts International


Comments

Read archived comments (8 so far)
November 2, 2006 4:47 PM Posted by mike_ch

Maybe I'm being foolish, but I'd like to think that one of the reasons slots are doing so much better at the Mirage properties is because they finally got some new machines. Three years ago I celebrated a birthday by staying at Bellagio and as much as I liked wandering the place, the machines were old and often had reel loops held together with scotch tape, machines that let out depressed "whiirrrrr"s when spinning, etc. I was still a visitor at the time, but walking over to Bally's/Paris revealed newer machines. Those old machines continued to overstay their welcome until 2005.

Mirage group resorts have only very recently become competitive in adding new themes (Mirage and Treasure Island in the past month had some slots up to play that I think hadn't even yet passed state approval, but were running on a temporary basis) and updating their technology. Only very recently has Treasure Island finally replaced their older video slots with the newer, flatscreen displays.

Basically, all three former Wynn hotels updated their slots from 1997 standards to 2007 standards. Harrah's has usually been pretty good at staying up to date, and of course WLV's casino was built with modern tech in mind. They are finally being competitive, and I'd like to think that's paying off for them.

November 3, 2006 9:01 AM Posted by Hunter

I'm here at Beau Rivage right now and the place looks fantastic. The shops are indeed now open and doing well.

I'll be publishing a report when I get back as I know many folks haven't been here... It really is like a mini-Bellagio, it's quite similar in a lot of ways.

November 3, 2006 11:33 AM Posted by detroit1051

Hunter, thanks for the Beau information. That corridor was pretty lifeless last month with all the shops closed. The only thing open was the Starbucks-like place toward the garage. Too bad you can't enjoy the three fine dining restaurants on this trip. I had a room overlooking the Gulf. It was fine in the daylight, but there's nothing to see at night. Next time, I think I'd ask for a City View room. Looks like your weather is as gloomy as Florida today. Hope you get some sunshine.

MGM Mirage sent an email today. They've updated the Players Club system at Vegas properties to include FreePlay at the machines. It sounds similar to the system Wynn opened with:

MGM MIRAGE - Players Club unveils an exciting new
advantage for members
POINTPlay
* Convert your Players Club points to FREE PLAY (TM) right at the machine.
* Manage your Players Club account from your favoritegames.
* An enhanced security feature protects your account with a simple PIN.
This November every Las Vegas Players Club casino will launch POINTPlay (TM). With this new benefit, all Players Club points will be redeemed at your favorite slot machines for POINTPlay (TM).
Activate POINTPlay in four easy steps:
Step 1: Visit the Players Club Desk.
Step 2: Select a secure, four digit PIN for your Players Club account.
Step 3: Go to your favorite slot or video machine.
Step 4: Insert your Players Club card and follow prompts.

November 3, 2006 12:37 PM Posted by detroit1051

Wynn's Earnings Next Tuesday, 11/7:


LAS VEGAS--(BUSINESS WIRE)--Wynn Resorts, Limited (NASDAQ:WYNN - News) announced today that it will release the Company's financial results for the third quarter ended September 30, 2006 on Tuesday, November 7, 2006, followed by a conference call at 3:00 p.m. PST (6:00 p.m. EST).

The call will be accessible on www.wynnresorts.com, under the company information section or by calling 800-794-8478 for domestic callers, and 706-643-0974 for international callers. The conference call ID is 1386210.

A replay of the call will be available from November 7, 2006 at 6:00 p.m. PST (9:00 p.m. EST) by dialing 800-642-1687 or 706-645-9291 for international callers. The replay access code is 1386210.

November 3, 2006 1:01 PM Posted by Leonard Stern

WYNN was originally scheduled to report Q3 earnings back on October 30th. Several top financial analysts have already publicly predicted to expect basically flat results at best case scenario.

November 3, 2006 4:31 PM Posted by Brian Fey

Yeah, I don't look for Wynn to turn a profit this quarter. There was a ton of money spend due to the opening of Macau. I think Wynn will swing to profits, mabye Q4, but early next year more likely.

November 6, 2006 7:29 PM Posted by Leonard Stern

CityCenter is now widely expected to garner the lion's share of the luxury condominium market in Las Vegas when completed due to the fact that more than 80% of all recently proposed high-rise condo projects have already been cancelled or otherwsie 'will never see the light of day':

http://lvbusinesspress.com/articles/2006/11/06/news/iq_%2010580493.txt

December 19, 2006 10:27 PM Posted by Felix Lee

1) Is www.migome.com your official website and related to MGM Macau Limited ?

2) Is your company having any branch in Malaysia ?