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MGM Mirage earnings dive 67% as Vegas begs for tourists

October 29, 2008 | 10:57 am

It’s crunch time for Las Vegas’ casino giants, as the stumbling economy slashes tourist traffic: MGM Mirage today said third-quarter net income dived 67% as room vacancy rates rose and gambling revenue sank.

From Bloomberg News:

MGM Mirage net income dropped to $61.3 million, or 22 cents a share, from $183.9 million, or 62 cents, a year earlier. Net revenue slid 5.9% to $1.79 billion.

The owner of the Strip's Bellagio, Luxor and Circus Circus resorts said revenue per available room, a measure of rates and occupancy, slipped 10% on the Strip as occupancy dropped to 95% from 97% a year ago, and the company charged on average $12 a night less for rooms ($135 versus $147 a year ago).

Lasvegassign_2 Gambling revenue fell 8% across all of MGM's properties because of a 13% slump in Las Vegas table game betting and a 13% slide in slot-machine takings at its Strip casinos.

Food and beverage sales dropped 3%, and entertainment revenue decreased 4%.

Las Vegas' McCarran airport passenger traffic slid 13% in September, and has dropped 5.7% this year, the Clark Country Dept. of Aviation said Monday.

Still, MGM’s shares were up $3.51, or 34%, to $13.84 at about 10:45 a.m. PDT, after the company said it was indefinitely postponing a planned Atlantic City development, as well as a joint venture on the Strip with the owner of the Atlantis casino in the Bahamas.

As Bloomberg noted, MGM needs to conserve cash flow to cover loans and finish its massive CityCenter project on the Strip.

The stock had been down 88% year to date through Tuesday.

Other battered casino issues also are getting a bounce today. Las Vegas Sands was up $4.35, or 88%, to $9.30 at about 10:45 a.m. PDT after the government of Singapore said it may help the company finish a $4-billion casino project in the city-state.

Wynn Resorts was up $9.95, or 30%, to $42.83.

"Short sellers" may be scrambling to close out their bearish bets on the stocks today, after watching the shares crater over the last month.

Photo credit: Allen J. Schaben / Los Angeles Times