Why MGM Resorts Stock Is Tumbling Despite an Earnings Beat

Shares of hotel and casino usability MGM Resorts International (MGM) dropped sharply Thursday aft nan company's apical executive mentioned lackluster bookings for a large Formula 1 race-car arena coming to Las Vegas successful November.

Chief Executive Officer (CEO) Bill Hornbuckle raised concerns connected MGM Resorts' second-quarter net telephone Wednesday astir room rates for nan Formula One (F1) Grand Prix title successful November, which he said were “showing immoderate softness.” He said that MGM is “hoping and believing that this title will proceed to gait up,” but added that it “presents a imaginable headwind successful nan 4th quarter.”

Strong Q2 Earnings Showing

The title bookings worries offset nan company’s beardown second-quarter financial results. Adjusted net per stock (EPS) came successful 46% higher than nan year-ago 4th astatine 86 cents, and gross jumped astir 10% to $4.33 billion, a second-quarter grounds for MGM Resorts. Both exceeded expert estimates from Visible Alpha.

Revenue from its Las Vegas properties was up 2.7% to $2.21 billion, besides up of forecasts, chiefly connected higher room gross and average regular rate, positive catering and banquet income gains, MGM Resorts said. Continued ramping-up of operations aft nan extremity of strict COVID restrictions successful China successful nan first 4th of past twelvemonth helped boost Macau gross by 37.7% to $1.02 billion.

Shares of MGM Resorts International slumped to their lowest level successful 9 months Thursday, falling almost 14% to $37 Thursday afternoon.