Hot Stock to watch: Vail Resorts, Inc. (NYSE: MTN)

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Vail Resorts, Inc. (NYSE: MTN) posted higher than expected results for the third quarter of FY 20, though got affected by the resulting closure of the company’s North American destination mountain resorts and regional ski areas on March 15, 2020 due to COVID-19 pandemic. The company has reported Net income attributable to Vail Resorts, Inc. of $152.5 million for the third quarter of fiscal 2020 compared to net income attributable to Vail Resorts, Inc. of $292.1 million, in the third fiscal quarter of the prior year. This included the after-tax effect of asset impairments related to the Company’s Colorado resort ground transportation company of about $21.3 million and acquisition and integration related expenses of about $1 million. Further, due to Covid-19 pandemic, the company has reduced the capital plan for calendar year 2020 by $80-$85 million, has suspended the cash dividend for a minimum of two quarters, which will result in preserving approximately $142 million, implemented a six month salary reduction for all salaried employees in the U.S. and has eliminated full salary for CEO and 100 percent of cash compensation of Board of Directors for six months. Meanwhile, the company’s total cash and revolver availability as of May 31, 2020 was of about $1.1 billion, with $465 million of cash-on-hand, $419 million of U.S. revolver availability under the Vail Holdings Credit Agreement, and $168 million of revolver availability under the Whistler Credit Agreement.

Going forward to the summer operations, the company plans to get operational for the North American Summer and Australian Ski season in late June or early July, which could vary by resort, and opening dates for each business are subject to new information and public health guidance with regard to COVID-19. The company anticipates that the results in the fourth quarter of fiscal 2020 will be materially negatively impacted due to the travel environment and the company expects lower visitation to the resort properties.

MTN in the third quarter of FY 20 has reported the adjusted earnings per share of $3.74, significantly beating the analysts’ estimates for the adjusted earnings per share of $2.67, according to the Zacks Investment Research. The company had reported 27.5 percent fall in the adjusted revenue to $694.1 million in the third quarter of FY 20, beating the analysts’ estimates for revenue of $612.9 million.

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