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Gaming Stocks Reporting Earnings on May 5: CZR, MGM, WYNN

The going has not been very easy so far in the first quarter for the gaming sector. Nevada-based Las Vegas Sands Corp. LVS, one of the biggest players in this sector, reported dismal results for the quarter, wherein both its earnings and revenues missed the respective Zacks Consensus Estimate and recorded year-over-year declines.

Boyd Gaming Corporation BYD, on the other hand, beat the consensus mark for earnings, while revenues missed the same. A Nevada-based company, Monarch Casino & Resort Inc. MCRI posted in-line earnings for the quarter, but managed to beat revenue estimates. Another gaming company, Penn National Gaming Inc. PENN was able to surpass estimates for both earnings and revenues this quarter.

The operating scenario in Macau continued to be difficult in the first quarter of 2016, thereby hurting earnings and revenues for these companies. Gross gaming revenues in Macau continued to decline through all the months of the quarter. The anti-graft corruption drive undertaken by the Chinese government is keeping VIP gamblers at bay, thereby hurting Macau revenues. Moreover, China's crackdown on illegal money transfers, credit growth issues and tighter restrictions on visas have had a negative impact on revenues in this region. The weakening yuan further dented Macau’s gambling revenues as it is making bets more expensive for Chinese gamblers. Also, the ongoing slowdown in the Chinese economy is hurting the mass market segment.

Nevertheless, a comparatively better performance at the main floor and non-gaming segments is somewhat compensating for the slowdown in the VIP gaming business in Macau.

Improving demand in Las Vegas due to rising employment rates, low energy prices and tourism growth have been helping casinos in the region. Moreover, the Las Vegas Strip, where gaming companies enjoy a significant foothold, has been recording high occupancy rates over the past year, which should boost their revenues. Further, diversification of resort portfolios and non-gaming options should benefit these companies.

This week, we expect earnings releases from major casino operators like Wynn Resorts Ltd. WYNN, Caesars Entertainment Corporation CZR, and MGM Resorts International MGM. Let’s take a look at how these companies are placed ahead of their scheduled announcements.

Wynn Resorts is set to report first-quarter 2016 results on May 5, after the market closes. Last quarter, the company posted a positive earnings surprise of 39.19%. However, the casino operator has posted an average negative earnings surprise of 4.60% over the trailing four quarters. Wynn Resorts currently has Zacks Rank #3 and an Earnings ESP of -4.82%. (Read: Wynn Resorts Q1 Earnings: Stock to Disappoint?)

Caesars Entertainment is set to report first-quarter 2016 results on May 5, after the market closes. Last quarter, the casino operator posted a negative earnings surprise of a massive 128.57%. The company has posted a negative average earnings surprise of 6.88% over the four trailing quarters. Caesars Entertainment carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. (Read: What Awaits Caesars Entertainment in Q1 Earnings?)

MGM Resorts is set to report first-quarter 2016 results on May 5, before the opening bell. Last quarter, the company posted a substantial negative earnings surprise of 114.29%. However, the company has recorded positive surprises in three out of the trailing four quarters, with an average earnings surprise of 106.49%. MGM Resorts carries Zacks Rank #3 and has an Earnings ESP of -46.15%. (Read: MGM Resorts' Q1 Earnings: Will Macau Hurt Results?)

Nevertheless, we believe not all hope is lost for casino stocks, as an improvement in the Las Vegas economy is mitigating the slump in Macau.

Stay tuned! Check later on our full write-up on earnings releases of these stocks.

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LAS VEGAS SANDS (LVS): Free Stock Analysis Report
 
WYNN RESRTS LTD (WYNN): Free Stock Analysis Report
 
MGM RESORTS INT (MGM): Free Stock Analysis Report
 
BOYD GAMING CP (BYD): Free Stock Analysis Report
 
MONARCH CASINO (MCRI): Free Stock Analysis Report
 
PENN NATL GAMNG (PENN): Free Stock Analysis Report
 
CAESARS ENTERTN (CZR): Free Stock Analysis Report
 
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