Reuters: Hot Stocks: UPDATE 2-MGM Resorts' Chinese unit sets $500 mln dividend

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UPDATE 2-MGM Resorts' Chinese unit sets $500 mln dividend Feb 20th 2013, 17:02 Wed Feb 20, 2013 12:02pm EST * Fourth-qtr adj loss of 23 cents/share vs est loss 22 cents * Fourth-qtr revenue $2.29 bln vs est $2.31 bln * MGM China sets $500 mln special dividend * Shares up as much as 3 percent (Adds analyst CEO comments, byline) By Sue Zeidler LOS ANGELES, Feb 20 (Reuters) - Casino operator MGM Resorts International's quarterly sales missed Wall Street expectations as revenue growth slowed in China, but its shares rose as much as 3 percent after its Chinese unit set a special dividend of $500 million. On a conference call with analysts, MGM Chief Executive Jim Murren said he expects the unit to pay additional distributions. "I expect MGM China will be able to continue to pay distributions to shareholders while investing in its second property in Cotai (in Macau). In fact, we have a board meeting next week where we will discuss putting in place a formal dividend policy," Murren said. MGM Resorts, which has a 51 percent stake in MGM China Holdings Ltd, said its $255 million share of the dividend would be passed on to shareholders. Revenue from MGM China, which accounts for about 32 percent of MGM Resorts' overall business, rose 2 percent in the fourth quarter, down from the 26 percent growth a year earlier. Slowing economic growth in China, tighter scrutiny of money transfers and the government's actions to combat corruption have dampened gambling sentiment. MGM Resorts, which operates the Mirage and Bellagio casino resorts, said revenue fell marginally to $2.29 billion. Analysts on average had expected $2.31 billion, according to Thomson Reuters I/B/E/S. Net loss widened to $1.22 billion, or $2.50 per share, in the quarter that ended Dec. 31, from $113.6 million, or 23 cents per share, a year earlier. Excluding items, the company reported a loss of 23 cents per share, compared with analysts' expectations of a loss of 22 cents per share. Deutsche Bank analyst Carlo Santarelli said the company beat his estimates. "Net-net, we find the results to be better than expected, into relatively low expectations. That said, we believe follow-through on margin strength in the fourth quarter will go a long way toward determining the trajectory of the stock as we move through 2013 post the recent run in shares," he said. The debt-laden casino operator said refinancing a $5 billion credit facility in December led to a loss of $505 million in the fourth quarter. On the call, Murren said the refinancing and other trends put the company on the path toward growth in 2013. The company also took a $600 million impairment charge related to the sale of land in Las Vegas and Atlantic City and from its investment in the Borgata Casino Resort in New Jersey. MGM Resort's shares were up about 2 percent at $12.98 on the New York Stock Exchange in late morning trading. (Reporting by Siddharth Cavale in Bangalore and Susan Zeidler in Los Angeles; Editing by Don Sebastian and Maureen Bavdek) Link this Share this Digg this Email Reprints

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