Melco Resorts stock up almost 2% as Q1 earnings beats expectations

MACAU – Melco Resorts & Entertainment Limited (NASDAQ: NASDAQ:), a prominent player in the Asian and European integrated resort market, reported a mixed financial performance for the first quarter of 2024. Despite surpassing analyst expectations for adjusted earnings per share (EPS), the company fell short on revenue estimates.

For the first quarter, Melco announced an adjusted EPS of $0.04, modestly outperforming the analyst projection of $0.03. However, the company’s revenue of $1.11 billion did not meet the consensus estimate of $1.13 billion. Compared to the same period last year, Melco’s revenue saw a substantial increase of approximately 55% from $716.5 million, signaling a robust recovery trajectory as the company capitalized on the resurgence of inbound tourism to Macau.

The company’s stock experienced an uptick of +1.82% following the earnings release.

Melco’s Chairman and Chief Executive Officer, Mr. Lawrence Ho, attributed the revenue growth to improved performance across all gaming segments and non-gaming operations. He highlighted the company’s proactive management changes and marketing initiatives, which have begun to reflect positively in the March and April results. Mr. Ho expressed optimism about the growth prospects in Macau and Melco’s ability to maintain its market leadership.

The company’s operating income for the quarter stood at $125.4 million, a significant leap from the $0.4 million reported in the first quarter of 2023. Additionally, Melco generated an adjusted property EBITDA of $298.8 million, up from $190.8 million in the previous year’s first quarter.

Melco’s financial position remains solid with total cash and bank balances of $1.29 billion, including restricted cash, and a net debt reduction of approximately $150 million compared to the end of the previous quarter. Capital expenditures for the first quarter of 2024 amounted to $36.4 million, primarily related to enhancement projects at City of Dreams in Macau and Studio City.

Looking ahead, Mr. Ho’s statement reflects confidence in the company’s strategic initiatives and the expected seasonal strength in the upcoming summer months, despite challenges such as regional conflicts and the impact of luck factors in VIP segments.

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