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MGM Resorts (MGM) Q3 Earnings to be Hit by Cybersecurity Issue
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MGM Resorts International (MGM - Free Report) has revealed the existence of a cybersecurity issue impacting specific systems. The company is actively investigating the matter. On or about Sep 29, 2023, it confirmed that an unauthorized third party accessed personal information belonging to some customers on Sep 11, 2023.
Upon discovering this issue, MGM Resorts promptly implemented measures to safeguard its systems and data including the temporary shutdown of specific systems. It swiftly initiated an investigation, collaborating with top cybersecurity experts, and is actively coordinating with law enforcement. It prioritizes security of its systems and data, demonstrating a strong commitment by implementing additional safeguards to enhance protection.
Cybersecurity Issue to Hurt Q3 Results
MGM anticipates that the operational challenges faced by its affected properties in September will affect its third-quarter 2023 results, particularly in Las Vegas operations, but with minimal impact in the fourth quarter. Despite this, it does not foresee a significant influence on its overall financial condition and annual results. Specifically, it estimates an adverse effect of approximately $100 million on Adjusted Property EBITDAR for Las Vegas Strip Resorts and Regional Operations, collectively, due to the cybersecurity issue in September. The impact on occupancy, primarily in September, was notable, with a rate of 88% compared with 93% in the previous year.
However, the company is optimistic about a robust fourth quarter, predicting record results in November, primarily driven by Formula 1. Forecasts indicate a rebound in occupancy to 93% in October (compared with 94% in the prior year), with full recovery expected in November for Las Vegas Strip Resorts. In addressing the cybersecurity issue, MGM has incurred one-time expenses of less than $10 million in the third quarter, covering technology consulting services, legal fees and expenses related to third-party advisors.
While MGM believes its cybersecurity insurance will sufficiently cover the financial impact of operational disruptions, one-time expenses and future costs, the complete extent of the issue's costs and related impacts has not been conclusively determined.
MGM Resorts currently has a Zacks Rank #3 (Hold). The stock has gained 6.5% in the past year compared with the industry’s growth of 9.8%.
Live Nation Entertainment, Inc. (LYV - Free Report) sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 34.6% on average. Shares of LYV have increased 8.4% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LYV’s 2023 sales and EPS indicates rises of 21% and 57.8%, respectively, from the year-ago period’s levels.
Hilton Worldwide Holdings Inc. (HLT - Free Report) carries a Zacks Rank #2 (Buy). HLT has a trailing four-quarter earnings surprise of 12.5% on average. The stock has gained 23.4% in the past year.
The Zacks Consensus Estimate for HLT’s 2023 sales and EPS suggests improvements of 14.8% and 23.7%, respectively, from the year-ago period’s levels.
OneSpaWorld Holdings Limited (OSW - Free Report) currently carries a Zacks Rank #2. OSW has a trailing four-quarter earnings surprise of 42.6% on average. Shares of OSW have risen 34.9% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS implies jumps of 44.5% and 117.9%, respectively, from the year-ago period’s levels.
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MGM Resorts (MGM) Q3 Earnings to be Hit by Cybersecurity Issue
MGM Resorts International (MGM - Free Report) has revealed the existence of a cybersecurity issue impacting specific systems. The company is actively investigating the matter. On or about Sep 29, 2023, it confirmed that an unauthorized third party accessed personal information belonging to some customers on Sep 11, 2023.
Upon discovering this issue, MGM Resorts promptly implemented measures to safeguard its systems and data including the temporary shutdown of specific systems. It swiftly initiated an investigation, collaborating with top cybersecurity experts, and is actively coordinating with law enforcement. It prioritizes security of its systems and data, demonstrating a strong commitment by implementing additional safeguards to enhance protection.
Cybersecurity Issue to Hurt Q3 Results
MGM anticipates that the operational challenges faced by its affected properties in September will affect its third-quarter 2023 results, particularly in Las Vegas operations, but with minimal impact in the fourth quarter. Despite this, it does not foresee a significant influence on its overall financial condition and annual results. Specifically, it estimates an adverse effect of approximately $100 million on Adjusted Property EBITDAR for Las Vegas Strip Resorts and Regional Operations, collectively, due to the cybersecurity issue in September. The impact on occupancy, primarily in September, was notable, with a rate of 88% compared with 93% in the previous year.
However, the company is optimistic about a robust fourth quarter, predicting record results in November, primarily driven by Formula 1. Forecasts indicate a rebound in occupancy to 93% in October (compared with 94% in the prior year), with full recovery expected in November for Las Vegas Strip Resorts. In addressing the cybersecurity issue, MGM has incurred one-time expenses of less than $10 million in the third quarter, covering technology consulting services, legal fees and expenses related to third-party advisors.
While MGM believes its cybersecurity insurance will sufficiently cover the financial impact of operational disruptions, one-time expenses and future costs, the complete extent of the issue's costs and related impacts has not been conclusively determined.
MGM Resorts currently has a Zacks Rank #3 (Hold). The stock has gained 6.5% in the past year compared with the industry’s growth of 9.8%.
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Live Nation Entertainment, Inc. (LYV - Free Report) sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 34.6% on average. Shares of LYV have increased 8.4% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LYV’s 2023 sales and EPS indicates rises of 21% and 57.8%, respectively, from the year-ago period’s levels.
Hilton Worldwide Holdings Inc. (HLT - Free Report) carries a Zacks Rank #2 (Buy). HLT has a trailing four-quarter earnings surprise of 12.5% on average. The stock has gained 23.4% in the past year.
The Zacks Consensus Estimate for HLT’s 2023 sales and EPS suggests improvements of 14.8% and 23.7%, respectively, from the year-ago period’s levels.
OneSpaWorld Holdings Limited (OSW - Free Report) currently carries a Zacks Rank #2. OSW has a trailing four-quarter earnings surprise of 42.6% on average. Shares of OSW have risen 34.9% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS implies jumps of 44.5% and 117.9%, respectively, from the year-ago period’s levels.