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Gambling Stock Roundup: Focus on MGM, CNTY, PNK Q3 Earnings

Zacks

The gambling industry was busy with third-quarter 2017 financial releases last week.

MGM Resorts International's MGM third-quarter 2017 earnings were in line with the Zacks Consensus Estimate while revenues topped the same.

Century Casinos, Inc. CNTY came up with better-than-expected results with both earnings and revenues surpassing the consensus estimate.

Meanwhile, Pinnacle Entertainment, Inc. PNK posted mixed results, wherein the bottom line came ahead of the Zacks Consensus Estimate while the top line lagged the same.

Recap of the Week’s Most Important Stories

1. MGM Resorts posted adjusted earnings of 33 cents per share in the third quarter, which came in line with the Zacks Consensus Estimate. However, the bottom line declined 43.1% on a year-over-year basis.

This Zacks Rank #3 (Hold) company’s total revenues of $2.83 billion surpassed the consensus estimate of $2.77 billion by nearly 2% and increased 12.4% year over year. This improvement reflects a significant rise in revenues from its Las Vegas operations, partially offset by weak results at MGM China (read more: MGM Resorts' Q3 Earnings Meet Estimates, Revenues Beat).

2. Century Casinos reported third-quarter 2017 adjusted earnings per share of 31 cents, significantly surpassing the Zacks Consensus Estimate of 11 cents. Notably, this Zacks Rank #3 company’s earnings also improved considerably from the year-ago quarter figure of 8 cents on higher revenues. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Net revenues of $41 million topped the consensus mark by 5% and rose 19% from the prior-year quarter. The results reflect an increase in Canada, United States, Poland as well as corporate and other revenues.

3. Pinnacle Entertainment posted third-quarter 2017 adjusted earnings of 23 cents per share, outpacing the Zacks Consensus Estimate of 21 cents by 9.5%. Also, earnings compared favorably with the year-ago figure of a loss of 1 cent.

Net revenues of $647.4 million went up 8.8% year over year, owing to increased contribution from The Meadows Racetrack and Casino, and growth in the company's same-store portfolio of businesses. The reported figure, however, lagged the consensus mark by over 1%.

This Zacks Rank #3 company experienced an increase in revenues at the Midwest and the West segments on a year-over-year basis. However, the same declined at the South segment, given the impact of hurricane Harvey on L'Auberge Lake Charles.

Price Performance

The following table shows the price movement of the major gambling stocks in the last week and the last six months:

Company

Last Week

Last 6 Months


WYNN

1.7%

22.5%

LVS

1.3%

15.6%

MGM

3.7%

3.8%

MLCO

-2.5%

13.8%

MCRI

-2%

47%

CNTY

0.5%

8.7%

PNK

2.1%

33.1%

In the last five trading sessions, share price movement of major gambling stocks was predominantly positive. MGM Resorts and Pinnacle Entertainment gained 3.7% and 2.1%, respectively. However, Melco Resorts & Entertainment Limited MLCO and Monarch Casino & Resort, Inc. MCRI lost 2.5% and 2%, respectively.

In the last six months, the price performance of gambling stocks was impressive. Among stocks that appreciated the most were Monarch Casino & Resort and Pinnacle Entertainment, rallying 47% and 33.1%, respectively. Wynn Resorts Ltd. WYNN also recorded a gain of 22.5% over the same time frame.

What’s Next in the Gambling Space?

We note that gambling stocks oscillated between gains and losses in recent sessions and with the earnings season approaching its end, investors can expect this volatility to continue in the coming days as well.

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