MGM Resorts CEO Jim Murren steps down, withdraws 2020 forecast blaming coronavirus

Earnings

MGM Resorts chairman and CEO Jim Murren has told the company’s board that he is stepping down, prior to his contract ending, the company announced Wednesday.

He will serve in his role until a successor is appointed, it said. Murren has been CEO since 2008, and he has been with the casino operator since 1998.

MGM shares shot up more than 7% in after-hours trading on the news, but the stock was last up about 4%. MGM has a market value of about $17.3 billion, and its stock has climbed about 17% over the past 12 months.

MGM said its board has formed a committee of independent directors to search for a replacement.

The U.S. casino operator also withdrew its financial forecast for 2020, as it assesses how the coronavirus epidemic will impact operations.

Wealthy Chinese patronage at Macau and Las Vegas make up a good chunk of business and the virus has clamped down travel and closed companies across China.

MGM said it suspended operations at its two properties in Macau for a government-mandated 15-day period, which started on Feb. 5 to prevent the spread of the infection locally.

MGM added that it was difficult to weigh the fallout of the epidemic on its business as the suspension could be extended and customer traffic could fall further at its properties.

“Although the outbreak has been largely concentrated in China, to the extent that the virus impacts the willingness or ability of customers to travel to the company’s properties in the U.S., the company’s domestic results of operations could also be negatively impacted,” MGM said.

In Macau, the company said it was posting about $1.5 million in operating expenses daily across both properties, as it kept some non-gaming operations running to support hotel guests.

The epidemic, which originated in mainland China and has killed more than 1,100 people, has taken a toll on casino operators as travel restrictions and fear of the virus spreading have led to cancellations of trips in the Far East.

“While the coronavirus will clearly have a near-term impact to MGM China, we remain confident that it will not have a long-term impact on our business,” the outgoing CEO said on a post-earnings call with analysts.

Read the full press release here.

Reuters contributed to this report.

Products You May Like

Articles You May Like

‘There will be a crisis we can’t even imagine’ Why activists are pushing for rent forgiveness during the coronavirus pandemic
What are the safest ways to vacation this summer? From hitting the road in an RV to renting a beach house
What it’s like to fly 3,000 miles across the country in a pandemic
Abercrombie & Fitch sales fall 34%, with stores forced shut during coronavirus pandemic; shares fall
United cuts 13 high-level executives as travel demand ‘still a very long way from where it was’

Leave a Reply

Your email address will not be published. Required fields are marked *