On Tuesday, Molson Coors Brewing Co. (NYSE: TAP) reported a surge in its first-quarter profit, while MGM Mirage Inc. NYSE: MGM) blamed a drop in first-quarter profits on an economy that's discouraging consumer spending.
Denver-based Molson Coors, one of the world's largest brewers, said net income for the quarter that ended March 30 totaled $37.1 million, or 20 cents per share, compared with $4.4 million, or 3 cents per share, in the year-ago quarter. Excluding a charge related to a joint venture, the company earned 32 cents per share. Net sales after excise taxes rose 10% to $1.36 billion. Analysts polled by Thomson Financial predicted a profit of 28 cents on net sales of $1.31 billion.
Molson Coors shares rose $3.94, or 7.4%, to $57.10 in afternoon trading after rising to a 52-week high of $57.74 earlier in the day.
Las Vegas-based MGM Mirage said earnings fell 30% to $118.3 million, or 40 cents per share, compared with the same quarter a year ago. Revenue for the world's second-largest casino company slipped 3% to $1.88 billion, and fell short of expectations of analysts surveyed by Thomson Financial. They had forecast net income of 43 cents per share on revenue of $1.9 billion.
MGM shares rose 6.6%, or $3.23, to $51.85 in trading Tuesday, but fell to $51.60 in after-hours trading.
While these results may suggest that consumers are spending their increasingly scarce entertainment dollars closer to home, its worth noting that Walt Disney Co. (NYSE: DIS) Tuesday reported a 22% rise in its Q2 net profit.
Reader Comments (Page 1 of 1)
5-06-2008 @ 8:48PM
Ski said...
Don't be surprised to see more casino's/hotel's start feeling the effects of this economy. Nobody will be able to afford driving to Vegas or purchasing airline tickets to fly there.
Which could be considered a good thing for the Colorado river and Lake Meade.
5-07-2008 @ 1:24AM
B. Harrison said...
Prediction: Las Vegas is in for some very rough times after construction of all of those very expensive new hotel-casinos. In addition to being the worst place in the nation for foreclosures on homes, people are a lot less apt to make a vacation trip to LV to gamble when the cost of living is spiraling out of control.
How are the owners going to pay for those new hotel-casinos? LV used to be known for inexpensive hotel rooms; cheap, good food; but not any more. Last year LV began to make more money from hotel fees, retaurants, and the selling of expensive merchandise. The price of the average meal had escalated to $35.00. The slot machines used to have a lot better pay outs than they have now also.
The "good ole days" of inexpensive trips to LV are long gone; and they can't turn the clock back; they are locked into paying for those expensive new hotels. In these tight economic times, it is doubtful that many people will opt for a LV vacation; and the competition for the Asian gamblers has increased with the opening of new casinos in Asia.
Like the problems with the economy with the financial institutions, the owners of the casinos have priced a lot of their customers out of the market. It's going to get a lot worse, for a long time, before it bottoms out.
Our financial corporations, the Fed, Geo Bush, and Congress have put the nation into dire economic situations . . . LV certainly isnot going to be immune to all of it either.
With the decline in business, there will be additional layoffs, and additional foreclosures on homes. The future is not very rosy for LV.