Mirage cash flow rising at Bellagio, Beau Rivage hotels

Adam Steinhauer

Friday, Oct. 1, 1999 | 11:08 a.m.

Mirage Resorts Inc.'s chief financial officer said he expects cash flows to rise at the third-largest U.S. casino company's new Bellagio and Beau Rivage casino resorts as they cut costs.

The Bellagio in Las Vegas is likely to earn cash flow of $230 million to $240 million this year, rising to between $275 million and $280 million next year, CFO Bobby Baldwin said. Beau Rivage, in Biloxi, Miss., will have cash flow of about $70 million this year, rising to $90 million to $100 million next year, he said.

Mirage, led by Chairman Steve Wynn, spent more than $2.2 billion building the two gambling resorts, both opened over the past year. Its second-quarter profit fell 37 percent as the properties struggled with competition and their own operating costs. The rebound Baldwin projected is better than some analysts expect.

"God bless them if they do it," said BancBoston Robertson Stephens analyst Harry Curtis, who rates Mirage shares "market perform." "To get there, they'll have to do a lot of cost cutting."

Mirage has reduced operating expenses at the Bellagio, its $1.6 billion Las Vegas gambling resort opened last October, to about $2.2 million a day from about $3 million at the time it opened, Baldwin said. He spoke this week at the Banc of America Securities Investment Conference in San Francisco.

The Las Vegas-based company is operating with fewer employees and has cut costs in areas like its botanical garden, where its elaborate flower displays won't be changed as often, Baldwin said.

Along with its botanical garden, Bellagio features a fine art gallery and 1,000 fountains that are choreographed with music and lights.

Baldwin, who is also president of the Bellagio, is serving temporarily as CFO, a Mirage spokesman said. The company is looking for a permanent replacement for Daniel Lee, who resigned the post three weeks ago.

Mirage shares have fallen 16 percent over the past year, partly on disappointing results at Bellagio and Beau Rivage. The stock was unchanged Thursday at 14.06.