MGM Resorts International reported disappointing quarterly earnings on Wednesday, as the company struggled with sluggish business in Las Vegas.
The casino operator, which owns numerous iconic properties on the Las Vegas Strip including the Bellagio and MGM Grand, reported a net loss of $200 million, or 35 cents per share, for the quarter ending in September. This was significantly worse than analysts’ expectations of a loss of just 22 cents per share.
The weak performance was attributed to a number of factors, including a decrease in revenue from its Las Vegas properties. MGM Resorts cited a decline in visitation to the city, as well as increased competition from other entertainment options, as reasons for the lackluster results.
In addition to the decline in revenue from its Las Vegas properties, the company also faced increased costs in the quarter. MGM Resorts reported higher labor costs and marketing expenses, which further squeezed its profit margins.
Despite the disappointing results, MGM Resorts CEO Jim Murren remains optimistic about the company’s future. In a statement, Murren highlighted the company’s strong balance sheet and diversified portfolio of properties, which includes locations in Macau and other international markets.
“We continue to focus on driving revenue growth and managing costs to improve our margins,” Murren said. “While we are disappointed in our performance this quarter, we remain confident in our ability to deliver long-term value to our shareholders.”
Investors, however, were not as optimistic. Following the release of the earnings report, MGM Resorts’ stock price fell by more than 5% in after-hours trading.
Analysts say that MGM Resorts will need to address the challenges facing its Las Vegas properties in order to turn things around. The company has already announced plans to renovate its Mandalay Bay and Park MGM properties in an effort to attract more visitors and increase revenue.
Despite the disappointing results, MGM Resorts remains one of the leading casino operators in the world, with a strong presence in key markets both domestically and internationally. The company will need to capitalize on its strengths and address its weaknesses in order to regain the confidence of investors and turn its business around.
