The acquisition of the Borgata in Atlantic City had a big impact on the bottom line for MGM Resorts International in the third quarter.
MGM’s numbers + Borgata
MGM took over full controlling interest in Borgata in August of this year — it used to own 50 percent, alongside Boyd Gaming — for a pricetag of $900 million. That meant the latest earnings report is the first time the AC resort’s numbers would appear on the balance sheet.
That impact was immediately noticeable, with Borgata providing most of the earnings growth. The rest of the core MGM business was relatively flat.
From the earnings report released by MGM:
Casino revenue for the third quarter of 2016 increased 23% compared to the prior year quarter, due primarily to the acquisition of Borgata and an increase in both table games and slots revenue.
Slots revenue increased 19% compared to the prior year quarter due primarily to the acquisition of Borgata, and increased 3% on a same- store basis compared to the prior year quarter.
More from Dan D’Arrigo, Executive Vice President and Chief Financial Officer of MGM:
“We remain committed to strengthening our balance sheet and returning MGM Resorts to investment grade as we continue to maximize cash flow and grow the Company in a financially prudent manner.
We believe that our strategic actions in the third quarter are aligned with these goals including opportunistically enhancing our capital structure through the issuance of notes at historically low levels, acquiring the remaining interest in Borgata, and increasing our exposure in the largest gaming market in the world through the purchase of an additional stake in MGM China.”
A big difference for MGM shares
MGM reported that earnings per share for the third quarter came in at $0.93 share, or $561.3 million in net revenue. That was a huge change from Q3 of last year, when earnings were just $94.7 million, or 12 cents a share.
MGM attributed $0.60 a share of that increase to a $430 million gain on the Borgata acquisition.
What was the end result of the sum total of the earnings report on MGM stock? From the Las Vegas Review-Journal, “shares of MGM Resorts International gained 77 cents, or 2.92 percent, to close at $27.18 on Monday.”
Things going well overall at MGM
The addition of the full breadth of Borgata’s revenue is just one of developments for the overall MGM business.
MGM National Harbor (in Maryland, near Washington, D.C.) and the Park Theater in Las Vegas are scheduled to open next month. MGM Springfield in Massachusetts is under construction.
It all points to continued growth for the MGM brand in New Jersey and beyond.
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