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Mirage expects to fall short
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July 1, 1999: 7:26 p.m. ET
Casino firm sees 2Q earnings at less than half of estimates
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NEW YORK (CNNfn) - Mirage Resorts Inc., the third-largest U.S. casino company, said it expects to earn between 7 and 10 cents a share in the second quarter, far less than analysts estimated, because of higher costs, competition and meager winnings at its gambling tables.
The Las Vegas-based casino and hotel operator had been expected to earn 24 cents a share, according to the average estimate of 19 analysts polled by First Call Corp. The lowest estimate among the group was for earnings per share of 19 cents for the quarter, which ended yesterday. Year-ago earnings for the quarter were 18 cents a share.
Higher costs associated with room renovations at its Treasure Island resort in Las Vegas, the grand opening of its Beau Rivage casino resort in Biloxi, Mississippi, fiercer competition on the Vegas strip and tougher luck at gaming tables in all its casinos contributed to the starkly lower earnings projections, the company said. The Beau Rivage resort opened its doors March 16.
Even though Mirage's revenues are expected to have risen 82 percent in the second quarter, "our new hotels have generally had higher profits in their second years than in their first years," said Stephen Wynn, the company's chief executive.
In addition to the Beau Rivage resort in the latest quarter, Mirage also opened its $1.9 billion Bellagio super-resort on the Las Vegas Strip last October. The finishing touches on Bellagio were completed in the latest quarter, the company said.
Not always a winner
Across all of Mirage's casinos, the company said it won about 16.7 percent of the money wagered at its tables. A normal "hold percentage" for the quarter would have been about 20 percent, the company said. The smaller-than-average winnings reduced Mirage's earnings by about 6 cents a share, it said.
Some one-time expenses the company laid out in the second quarter included $60 million to renovate rooms at the Treasure Island hotel in Vegas, a depreciation charge of $53 million on the two now-open casinos in Vegas and Biloxi and an extra $4 million on accounting statement costs.
Operating cash flow is expected to be $113 million in the second quarter, an increase of 51 percent from a year ago.
The Company's holdings also include the Golden Nugget Las Vegas, the Golden Nugget Laughlin - located on the banks of the Colorado river - the Holiday Inn Casino Boardwalk and 50 percent of the Monte Carlo Resort & Casino.
Mirage (MIR) shares ended the day Thursday unchanged at 16-3/4. The company issued its statement about its second-quarter earnings after the close of U.S. trading. 
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Mirage Resorts
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