In an effort to evaluate performance, we compare how the quarter measured up to previous management commentary and guidance




  • BETTER - MGM China was a bit better than projected and much better than expected when the quarter began.  Las Vegas performed in-line.  Q1 commentary was, as expected, positive with RevPAR guidance at +10%.  We did sense some uncertainty with regards to trends for the remaining 3 quarters of the year and limited visibility.



MGM 4Q 2013 REPORT CARD - mgm



  • WORSE:  Project cost increased to $2.9 billion due to redesign of entertainment options.  Remains on track for early 2016 opening.
  • PREVIOUSLY:  Remain on track for an early 2016 opening...budget is still standing at $2.6 billion.


  • BETTER:  4Q Strip REVPAR was 1% - slightly higher than projected.  1Q REVPAR growth expected at 10%.  1Q convention mix: 22% (near peak levels).  For FY 2014, 15.5%-16% mix (near peak levels).
  • PREVIOUSLY:  4Q room revenue to be up slightly year-over-year on relatively flat RevPAR with accelerating trends in the first quarter. In fact, looking into next year, 1Q convention trends are looking exceptionally strong. Are approaching peak convention mix in 1Q with an expected 21% convention room mix and beyond 1Q, expect an increase in convention room mix for all quarters throughout the year.


  • BETTER:  VIP RC increased 32% YoY.  MGM continues to maximize table productivity.
    • Still see opportunities for continued improvement in yield on the VIP tables to maximize profitability from this segment
    • In the process of upgrading main floor and enhancing our product offerings to drive future growth. Remodeling includes renovation and expansion of the Supreme Lounge which has been very successful...expect this to be completed in 2014. The Supreme Lounge is an exclusive area dedicated to high-margin premium mass market customers. 


  • BETTER:  Slot volumes grew 16% in 4Q 2013, compared with 10% growth in 3Q.
  • PREVIOUSLY:  Slot business, overall, has seen some flattening in the market. Even though there's good growth across the market, the growth rates have slowed a little bit.


  • SAME:  Strip flow-through hit 70% in 4Q.  But if you adjust out certain one-time items (e.g. vacation accrual policy), it is within that 50%-60% range.
    • Goal has been in the 60% range on a long-term basis. And that's extremely achievable.
    • Any ADR increase obviously will always go to the bottom line. And then in general, as the convention mix improves and the catering improves, that's a higher-margin business than normal food and beverage business. Hopefully, with the increased visitation, it will increase the occupancy in the shows, which also goes all to bottom line because those are just empty seats if they're not being filled right now. So the flow-through next year should be as strong if not stronger than what we've seen this year.



  • SAME:  Dialogue continuing.  In 1H 2014, MGM will be back in front of NJ DGE commission. 
  • PREVIOUSLY:  First goal is to be relicensed in the state. No reason to expect MGM won't be relicensed there.

Cartoon of the Day: Bulls Leading the People

Investors rejoiced as centrist Emmanuel Macron edged out far-right Marine Le Pen in France's election day voting. European equities were up as much as 4.7% on the news.

read more

McCullough: ‘This Crazy Stat Drives Stock Market Bears Nuts’

If you’re short the stock market today, and your boss asks why is the Nasdaq at an all-time high, here’s the only honest answer: So far, Nasdaq company earnings are up 46% year-over-year.

read more

Who's Right? The Stock Market or the Bond Market?

"As I see it, bonds look like they have further to fall, while stocks look tenuous at these levels," writes Peter Atwater, founder of Financial Insyghts.

read more

Poll of the Day: If You Could Have Lunch with One Fed Chair...

What do you think? Cast your vote. Let us know.

read more

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 2)

An interview with Neil Howe on why Boomers and Xers get it all wrong.

read more

6 Charts: The French Election, Nasdaq All-Time Highs & An Earnings Scorecard

We've been telling investors for some time that global growth is picking up, get long stocks.

read more

Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more

A Sneak Peek At Hedgeye's 2017 GDP Estimates

Here's an inside look at our GDP estimates versus Wall Street consensus.

read more

Cartoon of the Day: Green Thumb

So far, 64 of 498 companies in the S&P 500 have reported aggregate sales and earnings growth of 6.1% and 16.8% respectively.

read more

Europe's Battles Against Apple, Google, Innovation & Jobs

"“I am very concerned the E.U. maintains a battle against the American giants while doing everything possible to sustain so-called national champions," writes economist Daniel Lacalle. "Attacking innovation doesn’t create jobs.”

read more

An Open Letter to Pandora Management...

"Please stop leaking information to the press," writes Hedgeye Internet & Media analyst Hesham Shaaban. "You are getting in your own way, and blowing up your shareholders in the process."

read more