By: Las Vegas Now Staff
Casino giant MGM Mirage Inc. reported soaring fourth-quarter profits Thursday, including a hefty gain related to its CityCenter project under construction on the Las Vegas Strip.
The world's second-largest casino company said net income surged to $872.2 million, or $2.85 per share, in the period ending Dec. 31, compared with $201.6 million, or 69 cents per share, in the same period in 2006.
The company, which owns several Las Vegas Strip resorts including Bellagio, The Mirage and Mandalay Bay, said earnings from continuing operations jumped to $870.8 million, or $2.85 per share, from $199.1 million, or 68 cents per share. Quarterly revenue rose 4 percent to $1.93 billion from $1.85 billion a year earlier.
The results beat expectations of analysts polled by Thomson Financial, who expected net income of 55 cents per share on revenue of $1.92 billion.
“Our future in this year, 2008, and well beyond is very bright,” Terry Lanni, company chairman and chief executive, told analysts in a conference call that emphasized the company's diversification and developments in the U.S. and abroad.
“As a result of continued revenue growth and stable margins, we earned record profits in each of the four quarters last year,” Lanni said.
He said a key element in the fourth quarter was the Nov. 15 completion of a joint venture giving Dubai World, the investment arm of the Dubai government, a 50 percent stake in the CityCenter megaresort being built on the Las Vegas Strip.
Lanni called the transaction historic for the Las Vegas-based company, which received a $2.47 billion cash infusion. MGM Mirage will develop and manage the multi-hotel, retail and casino project. The project, now estimated at more than $8.1 billion, is expected to open in late 2009.
Dubai World's stake in MGM Mirage is due to increase to 9.1 percent in coming weeks with the purchase of 6.5 million more shares. Tracinda Corp., the investment arm of billionaire Kirk
Kerkorian, remains the main company stockholder, with just over 54 percent of company shares.
The company also cited the Dec. 18 opening of the $1.25 billion MGM Grand Macau, a joint venture in the Chinese gambling enclave of Macau, and said it recently obtained funding for what Lanni called “seed money” for a second project on Macau's Cotai Strip.
In November, MGM Mirage announced plans to manage, develop and operate a $3 billion mixed-use non-gambling complex in Abu Dhabi, including an MGM Grand resort.
“We are not investing any capital in this project,” Lanni said. “We will earn fees for managing the development and ongoing operations.”
Analyst Lawrence Klatzkin of Jefferies & Co. in New York, characterized the company as “confident in the future of gaming” with little fear of an economic slump.
“They expect a little bit of weakness in the first half of the year, but a recovery in the second half,” Klatzkin said. “They're saying the international side is doing as well as ever. They're going to be developing and managing, with other people's money, more than $10 billion worth of hotel projects.”
For 2007, the company said net revenues increased 7 percent, to $7.7 billion.
Fourth-quarter casino revenues increased 2 percent, with baccarat volume up 17 percent and slot machine revenues up 3 percent, the company said. Slot revenues at MGM Grand Detroit increased 12 percent with the opening of a new permanent slot facility.
A Jan. 25 fire on the upper facade of the company's Monte Carlo hotel-casino on the Las Vegas Strip resulted in $90 million insurance claim for property damage and business interruption, according to Bobby Baldwin, company design and construction chief.
No serious injuries were reported among the 5,000 guests and 1,000 employees who were evacuated. The 32-story property remained closed until Feb. 15, when 1,224 of its approximately 3,000 rooms reopened. Baldwin said 2,026 rooms will be open by this weekend. But the top six floors, with 570 rooms most seriously damaged by smoke and water, will be redesigned and renovated to reopen this summer.
MGM Mirage shares were up 81 cents, up 1.25 percent, in afternoon trading.
(Copyright 2008 by The Associated Press. All Rights Reserved.)
 |
