Mirage earnings drop

Gary Thompson

Monday, Nov. 9, 1998 | 11:22 a.m.

Mirage Resorts Inc. said today third-quarter earnings fell sharply due to a slump in baccarat play, lower win percentages than last year and higher corporate expenses.

Third-quarter net income fell to $30.1 million, or 16 cents a share, from $54.9 million, or 28 cents a share, the company said. Revenue slid to $338.1 million from $369.2 million in the 1997 third period.

Mirage said a decline in baccarat play cut about 3 cents a share from the latest quarter's results compared with the year-ago period's. In addition, a more-normal table-games win percentage slashed 6 cents from per-share net compared with the year-earlier quarter.

The 1997 third-quarter's results "benefited from high levels of baccarat play and the highest company-wide table-games win percentage since The Mirage opened in 1969," the company said.

Excluding baccarat, company-wide table-game drop rose 4 percent, while slot win was up 5 percent from the year-ago quarter, Mirage said. Non-casino revenue was even at $178 million, representing about 49 percent of total revenue.

Corporate expenses rose about $7.7 million due to political contributions, including Nevada races and the fight against Proposition 5 in California, as well as higher entertainment spending.

Mirage also said early results from its new $1.6 billion Bellagio resort are encouraging, though it warned that "the financial results of the first few weeks of any new major resort contain numerous distortions."

"In the case of Bellagio," the company said, "large numbers of sightseers distort certain revenue categories, while expenses are also high, with significant overtime and similar expenses being incurred to allow the new staff to provide a positive guest experience."

The company said Bellagio recorded $125 million of table-game play in its first 20 days of operation, 48 percent more than the first 20 days of table play at The Mirage.

"Likewise, room, food and beverage revenues have been more than double the comparable initial results at The Mirage," it said.

"The retail sales of the company-owned and leased shops at Bellagio after only 20 days are nearly $9 million -- a remarkable result of over $5 per square foot per day.

"Slot revenues of over $12.7 million exceeded in only 20 days the best month that The Mirage has ever had, even as The Mirage itself had an $11.2 million slot win in October -- a 4 percent increase over the prior-year period.

"Like The Mirage, Bellagio has been profitable from its first day of operation," the company said.

The average rate for rooms and suites occupied at Bellagio during its first 20 days has been $188 per night.

The Bellagio reservation center received 140,000 calls in the resort's first 20 days and confirmed approximately 28,000 new reservations. The average anticipated stay of such reservations is approximately three nights.