MGM Q1 2022 Earnings Report Recap

MGM beat on earnings and on revenue

Key Takeaways

  • MGM's Las Vegas room occupancy rate came in above analysts' expectations.
  • 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.
  • MGM announced an offer to acquire global online gaming company LeoVegas for approximately $607 million.
MGM Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
Adjusted EPS Beat $0.01 -$0.08
Revenue Beat $2.9B $2.8B
Las Vegas Room Occupancy Beat 78% 76.7%

Source: Predictions based on analysts' consensus from Visible Alpha

MGM Financial Results: Analysis

MGM Resorts International (MGM) reported Q1 FY 2022 earnings results that surpassed consensus estimates. The company reported positive adjusted earnings per share (EPS), the third straight after six consecutive quarters of adjusted losses per share. Analysts had expected the company to report an adjusted loss per share for the quarter. Revenue also came in above analysts' estimates, rising 73.2% compared to the year-ago quarter. It marked the fourth straight quarter of revenue growth after five consecutive quarters of declines. MGM's occupancy rate for its Las Vegas properties came in at 78% for the quarter, beating expectations.

The company's shares rose more than 1% in extended trading. Over the past year, MGM's shares have provided a total return of 1.7%, above the S&P 500's total return of -1.5%.

MGM Las Vegas Room Occupancy Rate

MGM's room occupancy rate for its Las Vegas Strip properties of 78% was well above the year-ago quarter's pandemic-depressed level of 46%. However, it marked a deterioration from the previous quarter's occupancy rate of 86%. MGM operates 13 resort properties in Las Vegas, including the Bellagio, MGM Grand, Luxor, Mandalay Bay, 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 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 rooms were counted, the number would be far worse.

MGM said that its Las Vegas Strip resorts benefitted from the inclusion of the operating results of the Aria resort, which was acquired in September 2021. However, results were adversely affected by a decrease in business volume and travel due to the spread of the Omicron variant in the early part of the quarter.

MGM to Acquire LeoVegas

MGM announced just prior to its earnings release that it has agreed to acquire global online gaming company LeoVegas AB for approximately $607 million. LeoVegas has online gaming licenses in eight jurisdictions, mostly in the Nordic countries and the rest of Europe. The acquisition is expected to expand MGM's reach as it aims to become a premier gaming entertainment company.

MGM's next earnings report (for Q2 FY 2022) is expected to be released on Aug. 2, 2022.

Article Sources
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  1. MGM Resorts International. "MGM Resorts International Reports First Quarter 2022 Financial and Operating Results."

  2. Visible Alpha. "Financial Data."

  3. TradingView. "Price Chart: MGM and S&P 500."

  4. MGM Resorts Destinations. "MGM Resorts Destinations."

  5. MGM Resorts International. "Form 10-K for the Fiscal Year Ended December 31, 2021," Page 41.

  6. MGM Resorts International. "MGM Resorts International announces offer to Acquire Global Online Gaming Company LeoVegas."

  7. Yahoo! Finance. "Earnings Calendar: MGM."

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