MGM, Sands Shares Take Hit Despite Q2 Profits

LAS VEGAS-MGM Mirage Inc. and Las Vegas Sands Corp. watched their share prices fall 7% Thursday despite posting profits and meeting Wall Street expectations for earnings. At issue in both cases was the local gaming market.

MGM’s profit in the second quarter climbed 4% from the same 2005 period, the company announced Thursday morning. Company executives attributed the increase to strong performance at the Bellagio and other high-end properties. Then they cited an apparent softening in its lower-end “value” properties like Circus Circus and predicted a lower-then-expected profit for the third quarter. Trading at nearly four times average volume, shares hit a 52-week low of $34.24 before rebounding to $35.21, down just over 7% ($2.69) on the day.

MGM’s second quarter net income increased to $146.4 million, or $0.50 cents per share, from $141.2 million, or $0.48 cents per share, in the same period last year. Wall Street’s average expectation was for $0.53 per share. MGM also projected earnings of $0.40 per share for the third quarter, about 10% below previous expectations. MGM’s revenue for the quarter rose 9% to $1.87 billion from $1.72 billion in the same period a year ago, but Wall Street expected $1.8 billion. Earnings would have been $0.56 per share save for one-time charges such as pre-opening expenses related to the Beatles-Cirque du Soleil show “Love” at the Mirage.