MGM Resorts Narrows 4Q Loss To $139 Million

LAS VEGAS (AP) - Cutting its expenses by more than half a billion dollars helped MGM Resorts International narrow its fourth-quarter loss even though its gambling and room revenue fell, the company said Monday.

The casino operator, in which billionaire Kirk Kerkorian is a major investor, reported a loss of $139 million, or 29 cents a share, for the quarter, compared with a loss of $433.9 million, or 98 cents a share, a year earlier. Its revenue was $1.47 billion, up from $1.45 billion.

The 2009 quarter's results included a hefty charge to reflect the plunging value undeveloped land MGM Resorts owns in Atlantic City.

Excluding one-time items from 2010's fourth quarter, MGM Resorts said it lost 20 cents per share.

Analysts polled by FactSet expected a bigger loss but more revenue for the Las Vegas company: an adjusted loss of 21 cents per share and $1.49 billion in revenue.

Shares of MGM Resorts fell 46 cents, or 3 percent, to $15.08 in morning trading.

Nonetheless, MGM Resorts CEO Jim Murren was upbeat in a conference call with investors.

"We're playing more offense now than we were able to play in 2008, 2009 and even the early part of last year," he said. "The balance sheet is in tremendous shape."

The company raised $486 million in new debt in October to help pay off $1.2 billion in debt due this year and extend the due date on another $3.5 billion in debt to February 2014.

When asked whether the company's non-luxury properties on the Las Vegas Strip might be dragging it down as the market attempts to recover from the recession, Murren said he thought they would prove crucial for recovery.

"It would be highly unlikely that we would divest those properties," Murren said. "In fact, we view them as foundations to grow further from a national perspective."

Analyst Carlo Santarelli of Wells Fargo Securities said he did not expect investors to be happy. MGM Resorts' earnings before interest, taxes, depreciation and amortization of $252 million were softer than expected, he said.

Gambling revenue dropped to $608.8 million from $628 million, while room revenue dropped to $309.7 million from $324.6 million. Food, beverage and entertainment revenue also fell, but the company spent $15 million less on promotional allowances.

Room occupancy was 84 percent on the Las Vegas Strip for MGM Resorts, down from 86 percent during the fourth quarter of 2009. Average nightly room rates were $110, the company reported.

The company cut its expenses by $577.5 million to $1.39 billion. The 2009 quarter included $549 million in pre-opening expenses for CityCenter, MGM Resorts' joint venture with Dubai World on the Las Vegas Strip. The complex's centerpiece, the Aria Resort & Casino, was 80 percent full at an average of $190 per night.

In Macau, MGM Resorts saw $580 million in net revenue during the fourth quarter, CFO Dan D'Arrigo said. Revenue for the year in the Chinese gambling enclave was $1.6 billion, he said.

While offering few new details because of market regulations, Murren said he was pleased with the company's progress toward an initial public offering on the Hong Kong stock exchange.

MGM Resorts said it had $12.3 billion in debt as of Dec. 31, with $499 million in cash and cash equivalents.

The company's loss for the full year was $1.44 billion, or $3.19 per share, compared with a loss of $1.29 billion, or $3.41 per share, in 2009. Revenue was up slightly to $6.02 billion, though casino, room, food and beverage and entertainment revenues all fell.