Thursday, April 30, 1998 | 10:35 a.m.
SUN STAFF REPORT
MGM Grand Inc., operator of the largest hotel on the Las Vegas Strip, today said its first quarter profit of $16.3 million was down substantially from the $30.2 million earned in the year-ago quarter.
Posting higher revenues today were Alliance Gaming and the Hard Rock Hotel.
The profit decline at the MGM -- from 51 cents per share to 28 cents -- was anticipated. Revenue of $180 million was down from $197.5 million.
MGM cited an unusually low table games win during the quarter.
"First quarter results obscure the material improvements at the MGM Grand Las Vegas as we transform the property into The City of Entertainment," said Chairman and Chief Executive J. Terrance Lanni.
MGM said revenue fell from $175 million to $161 million at the 5,005-room MGM Grand on the Las Vegas Strip and also fell slightly to $7.5 million at MGM Grand Australia. Its new South Africa operation posted revenue of $672,000 in the quarter.
Earnings before interest, taxes, depreciation and amortization (EBITDA) from the MGM Grand fell from $53 million to $34 million, but increased from $981,000 to $2.6 million in Australia. MGM's share of pretax income from its 50-percent owned New York New York hotel casino fell from $12.3 million to $8 million as business declined there to more normal levels after its spectacular 1997 opening. The South Africa operation contributed $282,000 in EBITDA.
MGM Grand said it's on track to build a hotel-casino in Detroit and continues to plan for one in Atlantic City.
Separately, Hard Rock Hotel Inc. reported first-quarter revenue increased 6.1 percent to $19.5 million, EBITDA of $4.4 million was up from $3.7 million; though net income fell from $700,000 to $300,000 due to higher interest costs.
And Alliance Gaming Corp. reported a quarterly loss of $1.1 million or 3 cents per share, an improvement from the $2.4 million or 8 cents lost in the comparable 1997 quarter.
Revenue increased 1 percent to $102.2 million. Slot route and casino results were up while sales fell at Alliance's Bally slot machine manufacturing unit.
"While EBITDA results for Wall Machine and Amusement Games, Route Operations and Casino Operations showed improvement, Bally Gaming and Systems experienced a slowdown in unit shipments as customers waited for regulatory approval of new products," said Chief Executive Morry Goldstein.
"With our updated Pro-Series and GameMaker product lines receiving Nevada approval in March and with Feature Frenzy and Roll the Dice receiving Nevada approval in April, we have seen a pick-up in orders in the June quarter. With the impending commencement of the field trial of our Thrillions progressive jackpot system and the filing of GameMagic with the regulators, we continue to remain on track with our plan to commercialize new products."
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