Casino Stocks Tumble After Vegas Disappoints
Two major casino operators found time to disappoint investors between Wednesday’s closing bell and Thursday’s open.
After their shares surged by 10% or more in the week before earnings, Las Vegas Sands (LVS) and MGM Mirage (MGM), the two largest U.S.-listed casino stocks are tumbling after disappointing results from Sin City.
As a whole, the Casino Stocks Index has lagged the S&P 500 by -8% in the month leading to Wednesday’s close, and despite optimistic comments from analysts earlier in 2010, this earnings season has thus far been a dud for the gambling sector.
Las Vegas Sands reported adjusted EPS of 3 cents, which was in line with analysts’ expectations, however the Street was watching for an uptick in Sin City, and results from Macau accounted for 80% of the company’s revenue for the period. Billionaire chairman and CEO Sheldon Adelson said, “our [Las Vegas] gaming volumes have stabilized, and the execution of our cost savings programs has positioned us to deliver improved operating margins and cash flows as the economy and our group business recover.” Sands shares are falling by -6.7% on the report.
Before the bell this morning, MGM Mirage posted a -25-cent adjusted loss per share in the fourth quarter, missing analysts’ consensus by -12 cents. CEO Jim Murren called 2009 a “challenging but momentous year for MGM Mirage, culminating with the opening of CityCenter in December,” referencing the casino’s $8.5 billion expansion, which was co-sponsored by Dubai World. Shares are off by -5.85%.
Elsewhere in the casino segment, stocks are selling off largely across he board. Isle of Capri Casinos (ISLE) and Wynn Resorts (WYNN) are both slipping by more than -2.5% ahead of their earnings reports next week. Melco Crown Entertainment (MPEL) and Boyd Gaming (BYD) are also in the red today.
As of this writing, the Casino Stocks Index is one of the 20 worst-performing tickerspy Indexes over the last month, down by -11%. Meanwhile, the Gaming and Slot-Machine Stocks Index has also slipped sharply for the period, with International Game Technology (IGT) and WMS Industries (WMS) both slipping by double-digits.
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