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Despite Improvement in Profits MGM Mirage Incorporated Missed Wall Street's Standards

On Thursday, May 3, 2007, big time casino organization, MGM Mirage Inc., commented that their non-gambling profits in Las Vegas with their brand new Beau Rivage resort facility in Mississippi for the first quarter of the year improved to about 17%.

But weaker casino performance caused the company to miss the standards set by Wall Street and as a result, the company's shares suffered a 4% setback.

Net profits improved to about $168.2 million or about $0.57 per share. The earnings of the company from their operation were around $163 million or about $0.55 per share, which have improved from $139.9 million or about $0.48 per share.

Analysts said that the expected earnings of the company are around 63% per share. The quarterly profits after the allowances rose about 9% or about $1.93 Billion from $1.77 Billion, but missed the target set by the analysts of about $1.95 Billion.

Shares of the MGM Mirage slid down to $2.94 or about 4.3% and closed around $65.38. After the trading, the shares gained around $1.57 or about 2.4% to $66.95.

Robert La Fleur, an analyst from the Susquehanna Financial Group, said that the gaming profits from the Las Vegas Strip were way below the expectations.

The results could cause serious concerns regarding the property value in Las Vegas. The Susquehanna Financial Group said that the NBA All-Star Game in February 2007, which took place during the same week as the Chinese New Year, had a downside effect regarding the profits on the strip.

Casino profits improved around 4% to about $811.9 million for the quarter, not including Beau Rivage, which opened in August 2007, slipping 6% and the casino table games revenue, like the Baccarat game, which many Asian customers favored, slipped 7%.

 

Thursday, May 24 , 2007
Edward O'Connor