MGM Mirage (NYSE: MGM) showed its hand in the earnings confessional Monday night after the close. The gaming firm banked 38 cents per share, or $105.2 million, compared with year-ago results of 40 cents ($118.3 million). Net revenue was down 20% to $1.5 billion. Excluding gains related to the sale of Treasure Island resort, the company lost six cents per share, falling short of analysts' estimates. MGM CEO and Chairman Jim Murren told investors in a conference call that while room rates are "firming" and overall demand seems improved, "[MGM] is not out of the woods yet by any stretch in this market ... at least [visitors] have got their wallets in their pockets [now] and they're spending a little more."
Heading into this report, options traders swooped into the MGM pits, most notably on the call side. This morning, the site of heaviest open interest in the front-month series is the May 7.50 call, home to more than 14,000 open contracts. In the June series, the 7.50 call strike is in the spotlight as well, with nearly 26,000 contracts in residence. This strike is in-the-money by about 25%, with the stock trading at $9.44.
In pre-market trading today, MGM shares were up 10.4% to test the $10 level. If these gains continue through the opening bell, MGM will enter double-digit territory for the first time since mid-January.
Beth Gaston Moon works for WeSeed.com, "The stock market for the rest of us." The above comments are not intended as trading or investment advice.
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