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LAS VEGAS, Nevada -- MGM Mirage said Wednesday that condo sales, revenues generated by some of its 10 Strip resorts and a full quarter of results from its reopened casino in Biloxi, Miss., gave it solid earnings for both the fourth quarter and all of 2006.
The company said earnings per share in the fourth quarter more than doubled from the fourth quarter a year ago.
"As expected, results were impressive on the Las Vegas Strip, with notable strength at Bellagio, Mandalay Bay and Luxor," Bear Stearns gaming analyst Joe Greff said in a note to investors. "Table game revenues were strong and table hold percentage was higher this year."
MGM Mirage said it earned net income of $201.6 million, or 69 cents per share, in the quarter ended Dec. 31, up from net income of $97.8 million, or 33 cents a share, a year ago.
Analysts polled by Thomson First Call estimated MGM Mirage would earn 48 cents a share in the quarter.
Quarterly revenue rose 11.4 percent, to $1.85 billion from $1.66 billion.
MGM Mirage said it had increases in three revenue-generating measuring sticks, hotel occupancy levels, average daily room rates and revenue generated per each available room.
Goldman Sachs gaming analyst Steven Kent said investors holding stock in MGM Mirage will continue to benefit from prolonged ownership.
"MGM Mirage shares have traded up dramatically the past few months, we believe primarily due to expectations of corporate finance activities," Kent said in a note to investors. "This morning's results showed more fundamental strength and illustrate MGM Mirage's operating prowess."
MGM Mirage shares have risen 44 percent since Nov. 21, the day before 89-year-old billionaire investor Kirk Kerkorian said he would buy as many as 15 million shares at $55 each. Kerkorian then agreed to buy 444,573 shares for $24.5 million, increasing his stake to 55.9 percent, or about $9 billion.
The company announced earnings before trading opened on the New York Stock Exchange Wednesday. MGM Mirage shares closed at $70.38, up 14 cents, or 0.20 percent. More than 4.6 million shares were traded, twice the normal daily volume.
For 2006, MGM Mirage said it earned net income of $648.3 million, or $2.22 per share. Company revenues in 2006 were more than $7.2 billion, a 17 percent increase.
Renovation of several of the company's Strip casinos, including The Mirage, helped spur visitation. On the Strip, the company's casinos reported revenues of $1.56 billion during the quarter.
MGM Mirage Chairman Terry Lanni said enhancements are continuing at other Strip properties, including those acquired in the company's $7.9 billion buyout of the Mandalay Resort Group in April 2005. All of the Excalibur's rooms will be refurbished, and the Monte Carlo is getting additional restaurants and amenities.
"Our strong fourth-quarter performance validates our disciplined approach to re-investing in our core assets," Lanni said. "This is something we said we would be doing, and it's something we're going to continue with. We believe this initiative will lead to positive results in 2007 and beyond."
MGM Mirage President and Chief Financial Officer Jim Murren said he expected 2007 to be another banner year.
"As demonstrated by the significant increases in cash flow at The Mirage and MGM Grand, our efforts at Mandalay Bay, Luxor and several other properties should lead to increased customer volumes and better pricing at these resorts," Murren said.
The company said its quarterly results were also enhanced by its share of the profits from the sale of condominium units at The Signature towers behind the MGM Grand and a pretax income of $86 million from Hurricane Katrina insurance recoveries.
Lanni wouldn't disclose revenues from the condo sales, but he said the company expected to sell the units for $1,400 a square foot and actual sales reflected $1,600 a square foot.
The company's Beau Rivage casino in Biloxi, which was closed for a year because of hurricane damage, reopened in August and reported its first full quarter of operations, contributing $89 million in net revenues. Lanni said the Gulf Coast results were enhanced by the November opening of the company's golf course, which is about 15 miles from the casino.
During a conference call with analysts, Mirage Resorts Chief Executive Officer Bobby Baldwin, who is overseeing development of the company's $7 billion Project CityCenter, gave an update on condominium sales, which began last month. MGM Mirage is building four different condo and condo-hotel high-rise developments as part of CityCenter.
Baldwin said the Mandarin Oriental is 90 percent sold out with 200 of the 227 units reserved, accounting for $613 million in sales, an average of $1,584 per square foot.
Meanwhile, residences at the Vdara will go to contract next Tuesday with 743 of the 1,543 units reserved.
At the Veer, 619 reservations have been taken for the 674 units with the residences going to contract on April 2. Reservation are not being taken for the Harmon's 209 condo units.
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