MGM Mirage loses $750M as CityCenter's value drops

LAS VEGAS (AP) - MGM Mirage's latest casino project isn't open yet, but a drop in the $8.5 billion complex's value combined with falling revenue to push the casino operator into the red in its third quarter, the company said Thursday.

The company, in which billionaire Kirk Kerkorian has said he may cut his substantial stake, lost $750.4 million for the three months that ended Sept. 30 largely because it wrote down the value of the CityCenter project it is building with Dubai World on the Las Vegas Strip.

MGM Mirage's third-quarter loss of $1.70 per share contrasts with a profit of $61.3 million, or 22 cents per share, in the period a year earlier. The results included charges of $1.72 per share related mostly to CityCenter, a 67-acre complex that starts opening next month.

Analysts polled by Thomson Reuters, whose estimates typically exclude one-time items like charges, expected MGM Mirage to post a loss of 7 cents per share.

Even with the hefty charges, executives at casino operator based in Las Vegas are optimistic CityCenter will be good for the company.

"We expect CityCenter to grow our business significantly and we are extremely excited to open this tremendous asset," Chairman and CEO Jim Murren said in a statement.

Revenue fell 15 percent for the quarter to $1.53 billion from $1.79 billion, but it topped Wall Street's forecast of $1.47 billion.

The company's casino revenue dipped 1 percent, with table revenue rising 7 percent and slot revenue falling 6 percent.

Gamblers are spending less during the economic downturn and visiting less often as they trim their discretionary spending. While MGM Mirage's casino revenue was down for the quarter, the company's 6 percent drop in slot revenue decline was smaller than the second quarter's 11 percent decline and the first-quarter slip of 13 percent.

The casino operator also reported a 21 percent room revenue decline, with revenue per available room on the Las Vegas Strip off 23 percent. Revenue per available room is considered a key gauge of a lodging company's performance.

MGM Mirage said lower room rates were caused by an expected drop in convention traffic. The average daily rate was $105 during the third quarter, compared with $136 a year earlier.

MGM Mirage's stock gained 58 cents, or 6.2 percent, to $9.90 in morning trading. Over the last year, the shares have traded in a range of $1.81 to $16.89.