Station Casinos closed out the year on a strong note, posting its 11th straight quarter of net revenue growth and 19th of improved cash flow. It marked blue-ribbon finish to a year that saw the highest revenues for the company since 2008. Net revenues in the company’s breadbasket, Las Vegas, were up 3% and the tribal-management sector had a breakout 2015, with revenues up 67%. With the company’s IPO on hold again, management kept mum about it.
* Congratulations to Wynn Resorts for being the third-highest-rated company in the hospitality sector in Fortune Magazine’s 2016 World’s Most Admired Companies roster. Wynn topped the Quality of Products/Services, and got high marks for management and as a long-term investment.
* MGM Resorts International‘s Macao-related writedown of $1.5 billion didn’t put a damper on JP Morgan analyst Joseph Greff‘s enthusiasm for the stock. “We are also bumping our Macau property 
level estimates to take into account better margins and less bad mass table game revenues,” he wrote, while describing Las Vegas Strip performance as “better than expected,” with 6% room-revenue growth. Return on investment at MGM Grand Detroit, Beau Rivage and CityCenter also exceeded expectations. Convention business on the Strip pushed room revenues at the core properties up 18%, compared to ‘only’ a 9% increase at luxury properties. As for Caesars Entertainment CEO Mark Frissora‘s claim that he’s eating the competition’s lunch, I will simply note that MGM cash flow on the Strip is up 14%.
The lion rode out a modest decline in gambling revenues, driven mainly by lower volume of table-game play, but slots were up 1%. VIP play in Macao was worse than expected but mass-market play was higher than anticipated, making for $499 million in revenue rather than the anticipated $484 million. All told, it could have been a lot worse. Meanwhile, the company’s plan to start charging for customer parking is playing to rave reviews from The Motley Fool.
MGM’s convention business is doing very good in Las Vegas. Jim Murren said that MGM “booked a half-billion-dollars” of new convention business for 2016 and 2017 and because of this Bellagio, MGM Grand and Luxor could see convention expansion opportunities.
Always love your insights, but MGM’s bottom line is still RED. It’s been nearly a decade since they converted cash flow on the Strip into real net profit. And the $1.5B write-off in Macau must be based on some quantitative analysis. What is it? Since profit expectations there are now much lower, did MGM consider reducing the construction cost in Cotai by the same $1.5B? Have you ever hear of City Center?
Rave reviews for charging for parking? Hello! How about charging for the Rest Room?