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Shares of gaming giant MGM Resorts (NYSE: MGM) jumped 12.1% in April, according to data provided by S&P Global Market Intelligence, after the company reported earnings and got some good news from Macau.
First quarter revenue jumped 22.6% to $2.71 billion and net income more than tripled to $206.8 million, or $0.36 per share. The quarter included full contribution from Borgata and National Harbor, which drove results.
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Gaming stocks in general got a lift from word that Macau's gaming revenue rose 18.1% in March, followed by a 16.3% increase for April. MGM has a single property on the Macau Peninsula now, but will open a new resort on Cotai later this year, which could be its most profitable resort in the portfolio.
MGM has been able to grow off its base in Las Vegas, and the growth in Macau is the boost the company needs to grow the bottom line. Leverage that was once a huge problem for MGM is also less problematic with $13.1 billion in debt and $841.4 million in EBITDA last quarter alone. If Macau continues to grow and Las Vegas grows slowly and steadily, this could be a sign of better things to come.
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