MGM Resorts Misses Q3 Profit Estimates as Las Vegas Room Rates Slide
The casino operator's stock sits near its 52-week low after a quarter where gaming strength could not offset weaker hotel pricing.
MGM Resorts International missed Wall Street's third-quarter profit forecast, and the gap was wider than the revenue shortfall. The company reported adjusted earnings of -$0.11 a share against a consensus estimate of $0.11, while revenue landed at $4.21 billion, short of the $4.25 billion analysts expected.
The casino business did much of the heavy lifting. Las Vegas casino revenue climbed 8% year over year on a record third-quarter slot win. Hotel rooms told a different story. Occupancy in Las Vegas was flat, but guests paid less per night, and that drag cancelled out part of the gaming gains. Higher airline and fuel costs also weighed on travel and leisure spending, according to management.
Outside Vegas, the numbers were steadier. Regional properties posted record slot win and 1% revenue growth, though their adjusted EBITDA slipped 3%. MGM China revenue rose 5%, and the company said its market share reached 17.1% in the quarter. The digital arm stood out: BetMGM's North American adjusted EBITDA jumped 112%.
Why it matters: a small revenue miss is easy to shrug off, but an earnings miss signals that costs and lower room rates are squeezing profits. That is the number investors watch most closely when consumers are already cautious about discretionary spending.
Investors reacted quickly. The shares closed at $27.27, down 2.57% from $27.99, and sat close to their 52-week low of $27.20. After hours they edged up to $27.33. The stock trades well below its 52-week high of $51.59, so the mood among shareholders remains guarded.
There is a hopeful note for the rest of the year. Management said trends improved in October, which points to a stronger fourth quarter than the third. Whether that holds will depend on whether Las Vegas hotel pricing recovers. For the full call details, see the original earnings call transcript.
