MGM Tops Las Vegas Records, Unveils New $2B Share Buyback Plan

Posted on: February 8, 2023, 04:03h. 

Last updated on: February 8, 2023, 05:35h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

MGM Resorts International (NYSE: MGM) announced Wednesday that its fourth-quarter and full-year 2022 earnings before interest, taxes, depreciation, amortization, restructuring or rent costs (EBITDAR), and revenue set new records in Las Vegas and throughout its regional portfolio.

MGM buyback
MGM CEO Bill Hornbuckle, seen here in 2020. The company reported strong Q4 results and announced a new $2B billion buyback plan. (Image: Bloomberg)

The Bellagio operator said it earned 69 cents a share in the final three months of 2022 on revenue of $3.6 billion. Earnings per share (EPS) tripled while sales jumped 18%. MGM posted a consolidated adjusted EBITDAR of $957 million in the fourth quarter.

On the Las Vegas Strip, where it’s the largest operator, MGM’s revenue rose 27% to $2.3 billion, underscoring the benefits of the addition of the Cosmopolitan to the operator’s roster. MGM’s Las Vegas adjusted property EBITDAR in the fourth quarter swelled to $877 million from $699 million a year earlier.

At its regional venues, which include casino hotels in Maryland, Massachusetts, and Michigan, among other states, MGM posted net sales of $991 million, compared with $900 million a year earlier, as adjusted property EBITDAR increased to $320 million from $309 million.

MGM Extends Buyback Binge

Already one of the gaming industry’s most dedicated buyers of its own shares, MGM continued gobbling up its stock in 2022 as the operator bought 76 million of its shares.

Our share buyback program continues to return capital to shareholders as we have already repurchased 4 million shares for $164 million year-to-date, adding to the 76 million shares we repurchased in 2022 and totaling approximately $4.7 billion since 2021. Beyond this, our Board of Directors authorized an additional $2 billion for share buybacks,” said CFO Jonathan Halkyard in a statement.

Based on Wednesday’s closing price of $41.43, $2 billion would buy more than 48 million shares of MGM equity, meaning the current shares outstanding tally of 393.30 million would be significantly reduced.

News of MGM’s new share repurchase program arrived after implementing a 1% buyback last year.   President Biden wants to quadruple that rate to support lavish spending programs.

MGM China Back to Profitability

MGM owns nearly 56% of MGM China, and that’s a positive these days, as the Macau gaming industry is bouncing back from the negative effects of China’s lengthy zero-COVID policies.

What we accomplished in 2022 is nothing short of remarkable and is a testament to our strategic plan, scale, brand strength, talented team, loyalty program, and the diverse geographies and channels in which we operate. We believe that there is strong momentum in our business, and our 2023 outlook remains bright, driven by a robust events calendar domestically, MGM China’s rapid year-to-date return to profitability, and BetMGM’s ongoing improvement in 2023,” said CEO Bill Hornbuckle in the statement.

The casino operator controls half of BetMGM. The internet casino and online sportsbook entity is expected to turn profitable in the back half of this year. UK-based Entain Plc (OTC: GMVHY) owns the other half of that business.