MGM REVEALS SAD PROFITS!

Some bad news coming from MGM! Nobody can tell what exactly has been going on in their yard, but the thing is the world’s second largest gaming company, namely MGM Mirage, has announced that its profits for the first quarter of the year fell by 30 percent due, in part, to the struggling American economy.
In addition, the Las Vegas-based company has also reported that the earnings have dropped to about $118.3 million, compared with $168.2 million for the same period in 2007.
According to a recent press release, the Chief Executive Officer for MGM, Mr. Terrence Lanni commented: “This quarter was challenging and it was clearly impacted by the economy. Our job is to manage within the context to maximize profitability in what will surely be a challenging year.”
It seems that their business plan doesn’t look so steady either, as the revenues also slipped to $1.88 billion from $1.93 billion for the same period in 2007. Mr. Lanni also explained that MGM had dome big plans to increase revenues using an ingenious marketing campaign, along with attempting to manage costs better.
In fact, he said the company made more than 400 mid-level corporate employees and property managers redundant last month but that there are no plans for further cuts unless the economy worsens further. Therefore, it totally failed!
Nevertheless, let’s not forget MGM still plays with the big guys, as it owns several resorts, including the famous Bellagio, as well as Mirage and Mandalay Bay on the Las Vegas Strip. Moreover, the company has an announced a pompous opening of a brand new joint venture in the Chinese gambling enclave of Macao, currently known as the MGM Grand Macao, back in December.
However, an unforeseeable event like that fire in January, at its Monte Carlo casino, has injured 17 people, but also burnt some of the company’s profits. It has been reported that the resort did not reopen until mid-February, while its profits were still down $20 million to $14 million. Afterwards, MGM reporting that one in five rooms and suites remain out of service.
Furthermore, Lanni stated that the company's resorts are still ‘eye-catchy’ for the wealthy customers and continues to generate revenues despite the weakness in economy. It seems that they’ve reported that the volume taken from table games fell four percent for the quarter alongside a one percent decrease on slot machine returns. Also, room revenues diminished by six percent with average room rates down two percent at the company's Las Vegas resorts. Things got pretty messy, right?
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