To be fair, MGM's third-quarter disclosure wasn't universally stellar, with the company delivering adjusted earnings per share of 24 cents, thereby missing Wall Street analysts' consensus target of 40 cents. However, the key metric that arguably should have been the focus was the top line, where revenue of $4.25 billion beat expectations calling for $4.23 billion. Moreover, this figure represented a 2% lift against the year-ago quarter.
By segment, most of MGM's individual units moved higher on a year-over-year basis. Most notably, MGM China posted $1.1 billion in sales, representing a 17% lift from one year ago. Also, management noted that this unit enjoyed a record adjusted EBITDA for the third quarter, along with market share of 15.5%.
Unfortunately, the one glaring miss came from Las Vegas, where the unit's $2 billion in sales translated to a 7% year-over-year decline. However, the business was impacted by a hotel room remodeling, which led to a decrease in revenue per available room.
Despite the explanation, the resort operator struggled, with MGM stock losing more than 3% in the trailing five sessions. In the trailing month, it's down almost 8%. While the volatility hasn't been pleasant, the red ink may also be hiding a quantitative reversal signal.
Using Real Science To Trade MGM Stock
In all ...
