Thursday, April 15, 2010 | 8:21 a.m.
Shares of MGM Mirage fell Thursday after the casino operator's preliminary estimates indicated that it lost $96.7 million during the first quarter.
MGM Mirage's stock dropped 92 cents, or nearly 6 percent, in early trading to $14.49. The shares have traded between $4.50 and $15.80 over the last year.
The company, based in Las Vegas, said late Wednesday that the loss was partly because it wrote down the value of its CityCenter development for a second time. MGM Mirage recorded an $86 million charge related to a drop in the value of CityCenter's residential units.
MGM Mirage owns CityCenter with Dubai World, the real estate investment arm of the Dubai government. MGM Mirage manages the $8.5 billion retail, casino, hotel and residential complex in Las Vegas.
The casino operator expects to report its full quarterly results in early May.
Dennis Forst of KeyBanc Capital Markets said he was most concerned about a drop in earnings before interest, taxes, depreciation and amortization at MGM Mirage's wholly-owned Las Vegas Strip properties.
The company reported $205 million in first-quarter EBITDA for its nine Strip sites, which is down from $283 million in the prior-year period. Those properties include the Bellagio, MGM Grand, Mandalay Bay and the Mirage, but exclude CityCenter.
The results missed Forst's $251 million estimate.
Janney Capital Markets' Brian McGill was also disappointed with the EBITDA results, which fell short of his $239 million estimate.
"The surprise to us came at the higher-end properties, which saw a drastic drop from year-ago levels," he wrote in a note to clients. McGill reaffirmed a "Sell" rating.
Forst predicts that there won't be a "material" turnaround in Las Vegas this year and believes any increased gaming demand in Las Vegas will probably be offset by new supply at CityCenter. He kept MGM Mirage's "Underweight" rating.
“In Las Vegas, the domestic gaming business was very weak,” MGM Mirage Chairman and Chief Executive Officer Jim Murren told Bloomberg News. “The international gaming business was very strong. We had a very solid Chinese New Year, and I think our competitors did as well.
“Las Vegas is slowly recovering,” Murren said. “We were so devastated by the economy in 2008 and 2009 that we’re pulling ourselves out of a big, big hole.”
Convention room bookings and revenue will rise 15 percent to 20 percent in 2011 from this year, he said. Aria, the casino and hotel centerpiece of CityCenter, had an occupancy rate in the first quarter of 63 percent with an average daily rate of $194, the company said. Aria occupancies will be higher than 80 percent by the end of the year, Murren said.
The Associated Press and Bloomberg News contributed to this report.