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LAS VEGAS — The largest operator of Las Vegas Strip hotel-casinos reported Thursday that fourth-quarter earnings dropped 65 percent. 

MGM Mirage Inc. was the third major Las Vegas-based gambling company to report quarterly earnings losses this week, but the casino giant beat analysts’ estimates for the period and reported annual increases in revenue and earnings. 

Executives said MGM Mirage resort volumes steadily improved through the fourth quarter despite losses caused by the travel slump following Sept. 11. 

“It now seems clear that no city in the United States has rebounded as quickly and profoundly as Las Vegas,” said Jim Murren, MGM Mirage president and chief operating officer. 

The company, whose properties include The Mirage, MGM Grand and Bellagio hotel-casinos, reported net income of $23.7 million, or 15 cents per share, including one-time charges, for the quarter ending Dec. 31, 2001. That was down sharply from $68 million, or 42 cents, a year earlier. 

Analysts’ consensus estimate was 9 cents per share. 

Quarterly revenues fell 13 percent to $896.3 million from $1.03 billion a year before, and operating cash flow was down 28 percent to $228.2 million when compared with $317.3 million in the same quarter a year ago. 

MGM Mirage executives told investors in a conference call Thursday that the company reduced its payroll costs by 10 percent during the quarter. 

Although more than 2,000 employees have been rehired, Terry Lanni, MGM Mirage chief executive, said the company intends to keep costs low. 

“Revenue and cost strategies deployed in the weeks following Sept. 11th have had the desired results,” he said. “Our focus on rebuilding our business while keeping a keen eye on costs was intended to return our operations to previous levels as quickly as possible.” 

MGM Mirage, which had its credit ratings downgraded to “junk’ status by Moody’s Investors Service, was hit harder than most of its competitors because of its concentration of resorts in Las Vegas, which depends heavily on air travel. 

Lanni said that though international high-end business fell 75 percent after Sept. 11, about two-thirds of the loss has been recovered. And domestic high-end business that was down 50 percent initially, is now off about 13 percent. 

“Our business has been far more resilient than anyone expected,” Lanni said. 

Lanni acknowledged a global economic and travel slowdown, but added that “current trends in our resorts indicate that casino and noncasino business should continue to improve throughout 2002.” 

As an example, Lanni said Super Bowl bookings are running even with last year, while Chinese New Year bookings “look very strong, but we have to wait and see who shows up.” 

Murren said the company is comfortable with a first-quarter earnings forecast of 24 cents per share. 

Industry analysts also expressed optimism that Las Vegas is on the rebound, even as gambling companies Park Place Entertainment Corp. and Station Casinos Inc., earlier reported significant quarterly losses. 

“While the quarter’s results were obviously impacted by the well-publicized decline in tourism and travel to Las Vegas following the tragic events of September 11, it is evident that MGG (MGM Mirage) made significant headway in reducing its cost structure to match a lower revenue base,” wrote Jason Ader, gambling analyst with Bear Stearns Co. of New York. 

“As trends continue to improve in Las Vegas throughout 2002, we believe the company has put enormous operating leverage in its business model as revenues ramp up.” 

For 2001, MGM Mirage fared much better with annual revenues up 29 percent to $4.01 billion and cash flow up 14 percent to $1.13 billion. Including nonrecurring expenses, the company reported net income of $169.8 million, or $1.06 per diluted share compared with $160.7 million, or $1.09 per diluted share in 2000. 

The 2001 operating results reflect a full year of the Mirage Resorts acquisition, which was completed in May 2000, officials said. 

Executives said the company also reduced its debt by $422 million, bringing total debt reduction to $949 million since the acquisition. Last year it sold $27 million in assets, bringing total assets sold since the acquisition to $256 million. 

The company’s stock was up 60 cents — or 1.9 percent — by midday to $32.12 per share. 

MGM Mirage owns or operates 19 casino properties in the United States, Australia and South Africa. 

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On the Net: 

MGM Mirage Inc.: http://www.mgmmirage.com