MGM Mirage and Sands Corp. to Unveil First Quarter Earnings
Las Vegas-based hotel and casino company, MGM Mirage and casino resort company Las Vegas Sands Corp. in Paradise, Nevada are scheduled to publish a report of their first quarter earnings for 2010 on May 6. MGM Mirage is set to announce its 2010 first quarter earnings before the opening of the Stock Market on Thursday, while the Las Vegas Sands Corp. will make its announcement later in the day.
Forecast on first quarter earnings of MGM Mirage
Based on forecast and previous analysis, it is expected that the Las Vegas-based company will report a 27 cents per share loss, resulting in an approximate net loss of about $199 million for the first quarter. Apparently, analysts believe that the company did not do well during the first quarter of 2010 compared to its last year’s performance. The consensus estimate last year only reported a 6 cents per share loss.
While waiting for the official report from MGM Mirage, analysts explain that the expected loss of 27 cents per share means that there won’t be a lot of change in the stock price in case earnings reach that level. This is because the 27 cents per share loss is set based on the value of the stock. The movement in the price of stock may be affected in case the company has a shift in its outlook. Even if the company posted good earnings, however, it doesn’t usually result in higher prices of stock, analysts explain.
In its preliminary report, MGM Mirage revealed that its CityCenter joint venture worth $8.5 billion created a loss of about $96.7 million when writing down its value. With this, the performance of CityCenter is of prime importance to investors who would want to know how the venture might be affecting other properties of MGM Mirage.
Forecast on first quarter earnings of Las Vegas Sands Corp.
Prior to the official report of the first quarter earnings of Las Vegas Sands Corp., investors are eager to know about how the company’s venture in Macau turned out. Aside from the company’s operation in Las Vegas, analysts are also looking into the newest resort of the company, the Marina Bay Sands, in Singapore. The $5.7 billion Marina Bay Sands is one of the biggest casino developments, next to the CityCenter venture of MGM Mirage and Dubai World.
According to Mark Strawn, Morgan Stanley & Co. analyst, some may underestimate the margin potential of this new resort along with the Singapore market. After the opening of the casino, Strawn believes in the gradual growth of the gambling market of Singapore. His forecast says that the market can generate up to $4 billion.
A known competitor of MGM Mirage, Sands has made a good venture in Macau. In Macau, it is reported that gamblers make higher wagers compared to that of other gambling markets such as Las Vegas. Even billionaire CEO Sheldon Adelson claimed that there’s great gambling market opportunities in Asia that are yet to be explored with the development of casino venues.
Based on the reported first quarter earnings of these two giant casino companies, investors may evaluate their stock options in the resorts and casino industry and look into the factors that affect its performance.