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Melco Crown (MPEL) Tops Q3 Earnings & Revenue Estimates

Melco Crown Entertainment Limited MPEL operates casino gaming and entertainment resort facilities in Asia. In order to cash in on a fast growing Philippine economy and increased tourism, Melco Crown launched its long-awaited new integrated casino resort, City of Dreams Manila. It is a part of the company’s plans to have casinos across Asia.

Meanwhile, Melco Crown earns a better part of its revenues from Macau, the only gambling destination in China. However, gambling revenues in Macau are currently slowing down due to anti-graft corruption drive undertaken by the Chinese government.

However, per the Macau Gaming Inspection and Coordination Bureau, gross gaming revenues (GGR) for the month of July fell 4.5%, but rose in August and September by 1.1% and 7.4%, respectively, on a year-over-year basis, indicating that the Macau market might be on the recovery path.

Nevertheless, a comparatively better performance at the non-gaming segments like rooms and food and beverages, are somewhat driving revenues. Also, the company’s cost-control efforts including effective management of marketing expenses are boosting profits and margins.

Investors should note that the consensus estimate for MPEL has hardly witnessed any significant movement over the last 30 days. Meanwhile, MPEL’s earnings have been strong over the past few quarters. In fact, the company posted positive earnings surprises in each of the last four quarters, with an average beat of 49.17%. Revenues, however, outpaced the Zacks Consensus Estimate in just one of the trailing four quarters.

MELCO CROWN ENT Price and EPS Surprise

 

MELCO CROWN ENT Price and EPS Surprise | MELCO CROWN ENT Quote

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MPEL currently has a Zacks Rank #3 (Hold) but that could change following Melco Crown’s earnings report which was just released. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We have highlighted some of the key stats from this just-revealed announcement below:

Earnings: MPEL beats on earnings. Our consensus earnings estimate called for earnings per share of 4 cents, and the company reported earnings of 13 cents per share. Investors should note that these figures take out stock option expenses.

Revenues: MPEL reported revenues of $1.15 billion. This surpassed our consensus estimate of $1.13 billion.

Key Stats to Note: Adjusted Property EBITDA was $289.2 million in the third quarter of 2016, up 21.9% year over year. The upside came mainly on the back of increased contribution from Studio City and City of Dreams Manila, partially offset by lower contribution from City of Dreams in Macau.

Stock Price Impact: In-active in pre-market trading.

Check back for our full write up on this MPEL earnings report later!

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