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In an effort to evaluate performance and as a follow up to our YouTube, we compare how the quarter measured up to previous management commentary and guidance


  • BETTER:  While MGM missed our Street high estimates, the company beat consensus even before considering low hold.  We estimate low hold cost the wholly owned properties $20-25 million in EBITDA and Aria $10-15 million. Forward commentary was positive.


  • BETTER:  Nicely ahead of schedule with excavation largely completed. Target opening date of early 2016.
  • PREVIOUSLY:  "Remains on schedule for opening in the first half of 2016."


  • SAME:  Public presentation of the Prince George casino will be in late Sept/Oct.  The final decision for MD will be given by year end.  The final decision for Massachusetts will be April 2014.
    • "In Maryland, we have been preparing our RFP for Prince George's County, which we will submit by the end of next week." 
    • "In Massachusetts, we are honored by Mayor Sarno's confidence in selecting MGM to bring a world-class urban resort to Springfield. This is an important milestone in the process as the project now seeks City Council approval after which a referendum is possible as early as July, and then ultimately, we will compete at the state level for the Western Region license."
    • "In Toronto, we and our partner, Cadillac Fairview, believe in our vision for an integrated resort in Toronto and we continue to work towards that development opportunity."


  • BETTER:  Las Vegas recovery continues, led by the luxury properties.  Monte Carlo also had a good quarter. 
    • "Visitation to Las Vegas remained strong and macro trends are improving here helping to drive the recovery."
    • "It appears to us that Las Vegas, the market hit hardest by the recession, is nicely recovering and that its performance will likely outstrip the existing regional markets for the foreseeable future."
    • "Our luxury properties continue to lead the way in the market, driven by increased convention room nights and the continued success of the high-end casino business."
    • "Organizational changes were made to streamline international and national marketing teams to better service our customers and drive profitability."


  • BETTER:  2Q REVPAR came in at 2.5%.  3Q REVPAR guidance is 3%. Aria had the best REVPAR in its history at $194. 
    • "We expect a strong convention calendar, which will drive RevPAR to be up approximately 2% year over year."
    • "Room revenues and ADRs increased by about 2% in the quarter. While occupancy was down slightly, occupied room nights increased by 1% at our Strip properties as the remodeled rooms at the MGM Grand are now on line."
    • "We are seeing strong returns on our room remodel investments as evidenced by Bellagio and MGM Grand where we were able to maintain high occupancy levels and drive increased room rates."
    • "We always knew the second quarter would be a little bit easier comp."


  • BETTER:  2013 convention room nights ADR is up YoY.  ADR pace for 2014 is up mid single digits.  Mgmt mentioned that 51% of forward bookings have been in the corporate/incentive segment, which has higher margins - double the pace historically. 
    • "The convention business in Las Vegas this year will be okay. It won't be great citywide, but next year is a big year citywide. So, when you have the kind of citywides we're predicting in 2014, that will accrue to the benefit of, of course, Mandalay, but also to the properties that need Mandalay to have that business Luxor, Excalibur and also because of the LVCBA Circus Circus. So the cores this year are doing well, but I would expect next year with a better convention business citywide that they will do better."
    • "On the convention side, of course, our leisure properties with significant convention space mainly sold out in peak season have a much easier time at raising rates."


  • SAME:  Board will continue to consider a special dividend from time to time.
  • PREVIOUSLY:  "MGM China also put in place a regular dividend distribution policy for up to 35% of its annual profits to be paid semi-annually. The board will also consider, going forward, special dividends from time to time."


  • WORSE:  Low table hold (-$10MM EBITDA impact) hurt results.  2Q also had a difficult comp. 
  • PREVIOUSLY:  "We continue to see growth in the food and beverage with a very strong quarter in catering and banquets driven by growth in the convention segment and recent dining enhancements to the property such as Javier's Mexican restaurant."


  • BETTER:  Sold 45 units in June and 21 units in July. Currently, they have 89 units left in their inventory.
  • PREVIOUSLY:  "We've actually seen in the last few months some pickup particularly in the remaining Mandarin inventory in terms of sales."


  • SAME:  Mass segment performed well across all customer classes.
  • PREVIOUSLY:  "We're encouraged to see not only our premium area such as our supreme and platinum lounges continue to perform well but also our general main floor product produced record results."


  • SAME:  Flight capacities are trending higher. Mgmt hopes this will bring more international visitors.
  • PREVIOUSLY:  "The seat capacities and especially in the summer is going to be up a few percent, which is very positive for us. Anything looking beyond two to three months, it's really hard to look at since the airlines are constantly changing their programs."