Key Takeaways
- MGM Resorts International raised concerns about advance bookings for a Formula 1 car race in Las Vegas scheduled for November, and the company’s shares slid Thursday.
- Chief Executive Officer (CEO) Bill Hornbuckle said Wednesday that MGM Resorts’ room rates around the event are showing some softness, which could affect fourth-quarter results.
- The hotel and casino operator’s second-quarter profit and sales released Wednesday beat estimates.
Shares of hotel and casino operator MGM Resorts International (MGM) dropped sharply Thursday after the company’s top executive mentioned lackluster bookings for a big Formula 1 race-car event coming to Las Vegas in November.
Chief Executive Officer (CEO) Bill Hornbuckle raised concerns on MGM Resorts’ second-quarter earnings call Wednesday about room rates for the Formula One (F1) Grand Prix race in November, which he said were “showing some softness.” He said that MGM is “hoping and believing that this race will continue to pace up,” but added that it “presents a potential headwind in the fourth quarter.”
Strong Q2 Earnings Showing
The race bookings worries offset the company’s strong second-quarter financial results. Adjusted earnings per share (EPS) came in 46% higher than the year-ago quarter at 86 cents, and revenue jumped nearly 10% to $4.33 billion, a second-quarter record for MGM Resorts. Both exceeded analyst estimates from Visible Alpha.
Revenue from its Las Vegas properties was up 2.7% to $2.21 billion, also ahead of forecasts, primarily on higher room revenue and average daily rate, plus catering and banquet sales gains, MGM Resorts said. Continued ramping-up of operations after the end of strict COVID restrictions in China in the first quarter of last year helped boost Macau revenue by 37.7% to $1.02 billion.
Shares of MGM Resorts International slumped to their lowest level in nine months Thursday, falling almost 14% to $37 Thursday afternoon.
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