MGM MIRAGE loses $750M as CityCenter's value drops

Nov 5, 2009 4:58 PM
Staff & Wire Reports | MGM MIRAGE (MGM) lost $750.4 million in its third quarter largely because the value of its latest casino project has fallen as gamblers continue to spend less during the recession, the company said Thursday. The loss of $1.70 per share for the three months that ended Sept. 30 contrasts with a profit of $61.3 million, or 22 cents per share, in the period a year earlier.
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The results included charges of $1.72 per share tied mostly to the CityCenter project MGM MIRAGE is building with Dubai World on the Las Vegas Strip. The $8.5 billion, 67-acre complex starts opening next month. Analysts polled by Thomson Reuters, whose estimates typically exclude one-time items like charges, expected MGM MIRAGE, which is based in Las Vegas, to post a loss of 7 cents per share. Executives at MGM MIRAGE, in which billionaire Kirk Kerkorian has said he may cut his substantial stake, said they are optimistic CityCenter will be good for the casino operator. "We expect CityCenter to grow our business significantly and we are extremely excited to open this tremendous asset," Chairman and CEO Jim Murren said in a statement. Revenue fell 15 percent for the quarter to $1.53 billion from $1.79 billion, but it topped Wall Street's forecast of $1.47 billion. The company's casino revenue dipped 1 percent, with table revenue rising 7 percent and slot revenue falling 6 percent. Gamblers are spending less during the economic downturn and visiting less often as they trim their discretionary spending. While MGM MIRAGE's casino revenue was down for the quarter, the company 6 percent drop in slot revenue decline was smaller than the second quarter's 11 percent decline and the first-quarter slip of 13 percent.

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