MGM Resorts International on Feb. 12 withdrew its full-year financial targets for fiscal 2020 partly due to the ongoing COVID-19 outbreak, which has completely halted its Macao operations.
The hotel and casino operator said it is seeing increased volatility in its business due to the worldwide spread of COVID-19 and the marketwide weakness in Far East baccarat in Las Vegas. COVID-19 is caused by a member of the coronavirus family that is a close cousin to the SARS and MERS viruses that have caused outbreaks in the past.
With both of its Macao properties temporarily closed, the company is actively managing costs and incurring about $1.5 million of operating expenses per day mostly due to payroll, Chairman and CEO James Joseph Murren said during a post-earnings call.
However, the company is still encouraged by the long-term outlook in most of its key segments.
"While the current situation creates volatility in our business near term, we are confident that it does not reflect the medium- to the long-term earnings potential of these assets or in the marketplace," said Murren, who earlier the same day announced his intention to step down as CEO.
MGM disclosed its outlook withdrawal as it reported fourth-quarter and full-year 2019 results.
For the fourth quarter, adjusted diluted EPS came in at 8 cents, higher than the loss-per-share of 3 cents from the prior-year period but significantly lower than S&P Global Market Intelligence's mean consensus estimate for normalized EPS of 27 cents. Net revenue grew 4% year over year to $3.19 billion from $3.05 billion for the same quarter in 2018.
For full year 2019, MGM saw adjusted EPS of 77 cents, compared to 95 cents in the comparable period a year ago, missing the Market Intelligence mean consensus estimate for normalized EPS of 91 cents. Consolidated net revenue rose 10% year over year to $12.90 billion from $11.76 billion a year ago.
In January 2019, the company outlined a growth plan called "MGM 2020," in which it planned to deliver a total annualized EBITDA increase of $300 million, with $200 million expected to be reached in 2020 and the remaining $100 million by the end of 2021.