Wynn Macau Ltd.’s full-year profit missed analysts’ estimates as the casino company benefited less than its competitor Sands China Ltd. from surging gambling revenue in the former Portuguese colony. The stock dropped.
Fourth-quarter net income gained 15 percent to $239.9 million from $208.8 million a year earlier, Wynn Resorts Ltd.’s Hong Kong-listed unit said in a statement to the local stock exchange today. Based on numbers derived from the statement, full-year profit was $759.8 million, lower than the average estimate of $795.3 million from 16 analysts surveyed by Bloomberg.
Wynn plans to build a casino in Cotai to fend off rising competition in Macau, the only place in China where casinos are legal, as Sands China Ltd. and other operators increase gaming centers to tap surging numbers of Chinese gamblers. Sands China, controlled by Sheldon Adelson’s Las Vegas Sands Corp., this week posted annual profit that beat analysts’ estimates.
“Today’s numbers are in line with my expectations but I’m worried about its future growth because there’s still no news on when its Cotai project will be approved,” Lantis Li, a Hong Kong-based analyst at Capital Securities Corp., said. “If they don’t have a new facility, they may lose out to rivals like Sands. They are under a big threat.”
Wynn Macau shares fell as much 5.6 percent to HK$19.64 before trading at HK$19.96 at 2:12 p.m in Hong Kong. Sands China was unchanged at HK$27.75 after earlier rising as much as 4.7 percent. Wynn Macau has gained 2.3 percent this year, less than the 26.4 percent gain of Sands China.
Fourth-quarter sales rose to $995.5 million from $912.2 million a year earlier, Wynn Macau said. The company’s earnings growth lagged behind that of Sands China, which this week reported a 44 percent jump in fourth-quarter profit.
Macau, which surpassed the Las Vegas Strip as the world’s biggest casino revenue hub in 2006, saw total gambling revenue climb 42 percent last year to 268 billion patacas ($33.6 billion), according to Macau’s Gaming Inspection & Coordination Bureau.
Sands is developing casino resorts in Macau to add to the Venetian, Four Seasons and Sands. The first phase of Sands Cotai Central is on track to open in about eight weeks, the company said yesterday.
Wynn Resorts said yesterday that work on the budget and scope for a new project in Cotai is continuing. In September, Wynn Macau agreed to pay the Macau government 1.55 billion patacas ($194 million) as a premium for 51 acres of land in the Chinese city. Wynn Macau may open a new casino by 2015 at the earliest, Deutsche Bank said at the time.
Wynn Resorts, led by founder, Chairman and Chief Executive Officer Steve Wynn, is embroiled in a legal dispute with board member and former vice chairman Kazuo Okada over access to spending records.
Wynn Resorts yesterday reported a 67 percent increase in fourth-quarter profit. The stock closed 2.6 percent higher at $120.78 in New York.