Wynn Resorts Quarterly Profit Doubles After Opening of Second Macau Casino
July 30 (Bloomberg) -- Larry Haverty, a portfolio manager at Gamco Investors Inc., talks with Bloomberg's Susan Li about the outlook for Wynn Resorts Ltd. and Las Vegas Sands Corp., and his investment strategy. Wynn Resorts, owner of the Wynn and Encore casino resorts in Las Vegas and Macau, reported second-quarter profit doubled after the opening of its second property in the only part of China where casinos are legal. (Source: Bloomberg)
July 22 (Bloomberg) -- Aaron Fischer, an analyst at CLSA Ltd., talks with Bloomberg's Linzie Janis about the outlook for Hong Kong's casino stocks. Macau casino gambling revenue may rise 72 percent this month from a year earlier as gamblers who wagered on the World Cup soccer tournament return to betting on card games in the Chinese city, according to CLSA. (Source: Bloomberg)
Wynn Resorts Ltd., owner of casino resorts in Las Vegas and Macau, reported second-quarter profit doubled after it opened a second property in the only part of China where casinos are legal.
Net income climbed to $52.4 million, or 42 cents a share, from $25.5 million, or 21 cents, a year earlier, Las Vegas-based Wynn said today in a statement. Excluding some items, profit of 52 cents beat the 42-cent average estimate of 20 analysts surveyed by Bloomberg.
As Las Vegas begins to recover from a record two-year slump, Macau is booming. Wynn opened Encore Macau in April, doubling its presence in the world’s biggest casino center, where overall gambling revenue surged 67 percent in the first half of 2010. Plans to build a third resort in Macau’s Cotai area are ahead of schedule, founder and Chief Executive Officer Steve Wynn said on a conference call today.
“Business is slightly better in Las Vegas, we’re noticing a little improvement,” Wynn said. Adding Encore in Macau with “high-end pits” helped the company attract more than its “fair share,” he said.
Macau revenue soared 74 percent in the quarter, boosting companywide sales 38 percent to $1.03 billion, which beat the $983.6 million analysts expected. Casino growth in the Chinese territory exploded after the government ended Stanley Ho’s 40- year monopoly and let foreign companies, including Wynn and Las Vegas Sands Corp., build resorts that attract mainlanders.
Las Vegas Attraction
Cash flow, measured as adjusted property earnings before interest, taxes, depreciation and amortization, rose 46 percent to $281.4 million. It was boosted by an 84 percent jump in Macau Ebitda, which more than offset a 14 percent decline in Vegas.
Resort operators in Las Vegas, the largest U.S. casino and conference market, have cut room prices, boosted special offers and increased overseas marketing to attract gamblers and vacationers. Wynn Las Vegas’s average daily rate fell 9.6 percent in the second quarter to $197, filling 92.6 percent of rooms, compared with 86.6 percent a year ago.
The company is seeing “some modest improvement” in Vegas room rates as it increases convention and group bookings to as much as 18 percent of its available nights, from an average of 12.5 percent last year, Wynn Las Vegas President Andrew Pascal said on today’s call. Renovating the resort’s 2,716 rooms and suites will temporarily reduce supply, helping rates, he said.
“We’re a little bit encouraged and we hope that we’ll continue to see some modest improvement for the balance of the year,” Pascal said.
Wynn Resorts shares slipped 2 cents to $87.85 at 4 p.m. New York time in Nasdaq Stock Market trading. The stock has climbed 51 percent this year. Shareholders will be paid a quarterly dividend of 25 cents, the company said today.
Wynn last week announced preliminary Las Vegas results for the quarter when the company replaced bonds due in 2014 with notes due in 2020.
To contact the reporter on this story: Beth Jinks in New York at bjinks1@bloomberg.net
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