LV firms issue profit warnings

Monday, Oct. 1, 2001 | 10:44 a.m.

Big Las Vegas Strip casino operators MGM MIRAGE and Mandalay Resort Group, and locals' giant Station Casinos Inc. warned investors that the reluctance of people to travel after the terrorist attacks will hurt their earnings.

The companies didn't specify precisely how badly their profits have been hurt by the slowdown hitting the travel industry.

MGM MIRAGE said its earnings for the quarter ending Sunday will be substantially below the consensus estimate of 38 cents per share.

"Business activity has gradually improved but is not nearly back to pre-attack levels," said Jim Murren, president and CFO. "We have implemented numerous initiatives to improve revenues and reduce costs to manage our business in the current environment. Our primary objective at this time is to increase customer volume so that we may bring back as many of our displaced employees as quickly as possible. While the short-term impact will remain significant, we are confident of our long-term prospects given the quality of our people, assets and brands."

Mandalay said its earnings per share for the third quarter ended Oct. 31 will "significantly trail" the profit of 38 cents per share in the year-ago quarter.

And Station said for the two weeks ending Sept. 24, its daily gaming revenue levels fell 7 percent to 9 percent while hotel revenues fell between 23 percent and 27 percent.

"Revenues have been improving during the last three weeks, but we don't know how long it will take for revenues to recover to previous levels," Chief Financial Officer Glenn Christenson said. "We continue to believe in the fundamentals that have made Las Vegas the fastest-growing community in the country, with an economy that has been the envy of virtually every community in the nation. We also believe that the 12,000 to 15,000 jobs recently eliminated in the city will be replaced in the near future."

Station said there have been no layoffs at its properties, but it's cutting costs with flexible scheduling and reduced hours for employees in some departments and with executive pay cuts.