MGM Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
Adjusted EPS Beat -$0.13 -$0.39
Revenue (billions) Beat $2.3 $2.2
Las Vegas Room Occupancy Rate Beat  77% 73.5%

Key Takeaways

  • MGM's Las Vegas room occupancy rate surpassed analyst predictions.
  • Las Vegas is MGM's biggest market and the room occupancy rate provides a measure of the total number of available rooms that are filled with paying guests.
  • Revenue for Q2 FY 2021 was nearly 8 times that of Q2 FY 2020, beating already-optimistic predictions.

Source: Predictions based on analysts' consensus from Visible Alpha

MGM Financial Results: Analysis

MGM Resorts International Inc. (MGM) reported strong results across the board in its Q2 FY 2021 earnings report. The company posted a sixth consecutive quarter of adjusted losses per share, but losses were substantially smaller than analysts had predicted. Revenue also exceeded analyst predictions, although by a smaller margin. Still, revenue for the quarter was nearly 8 times that of one year prior, suggesting that MGM has made strong progress toward recovery from the COVID-19 pandemic's impact on its business.

MGM shares dropped slightly, by about 0.6%, in after hours trading immediately following the earnings release. The company's stock has vastly outperformed the broader market in the past year. MGM shares have provided a 1-year trailing total return of 123.0% as compared with 33.2% for the S&P 500, as of Aug. 4, 2021.

MGM Las Vegas Room Occupancy Rate

MGM also beat analyst expectations by a fair amount in its Las Vegas room occupancy rate. Analysts had predicted a recovery from a low of just 43.0% in Q2 FY 2020 to 73.5% for Q2 FY 2021. The company surpassed this expectation, posting stronger recovery than anticipated. Nonetheless, the Las Vegas room occupancy rate is substantially lower than Q2 periods before the pandemic, indicating there is still ample ground to be regained.

MGM owns 13 resort properties in Las Vegas, including the Bellagio, MGM Grand, Luxor, Mandalay Bay, The Mirage, and Excalibur. The room occupancy rate is a key metric indicating the percentage of a resort's available rooms being occupied by paying guests. Investors should note that rooms that were out of service during the three months ended June 30, 2021 and in 2020 due to pandemic-related hotel closures were not counted as part of the total available room count in calculating the room occupancy rate. If these were counted, the occupancy rate would be significantly lower.

MGM Announces Sale of MGM Growth Properties

In a separate press release, MGM announced that it would sell MGM Growth Properties Inc. (MGP), a real estate investment trust (REIT) it launched in 2016. MGM Growth Properties will be acquired in a stock-for-stock transaction with VICI Properties Inc. (VICI) that values MGM Growth Properties at $17.2 billion. VICI will redeem a majority of MGM Growth Properties operating partnership units held by MGM Resorts. MGM will receive cash proceeds of about $4.4 billion and retain its VICI operating partnership stake worth approximately $370 million.

Next Earnings Report

MGM's next earnings report (for Q3 FY 2021) is estimated to be released on Nov. 3, 2021.