Wynn Resorts Ltd., owner of casinos in Nevada and Macau, rose as much as 7.8 percent, the most in more than seven months, after third-quarter profit beat analysts’ estimates and the company doubled its quarterly dividend.
Wynn Resorts rose 6.5 percent to $119.56 at 10:43 a.m. in New York and traded as high as $121 for the biggest intraday gain since March 2. The stock had gained 1.6 percent this year through yesterday.
Improvement in Las Vegas, where the company operates the Wynn and Encore hotels, along with plans to open a second Macau resort in 2016, gave Wynn Resorts confidence to declare a $7.50-a-share special cash dividend, up from $5 a year ago. It also plans to double the regularly quarterly payment to $1 a share, for an indicated yield of 3.6 percent.
“There’s a lot of attention being paid to stocks that have good, strong, consistent, predictable yield,” founder and Chief Executive Officer Steve Wynn said on a conference call. “And we feel that we can be predictable and have a nice yield at $4.00 a share a year.”
Third-quarter profit excluding some items totaled $1.48 a share, the Las Vegas-based company said yesterday in a statement. That beat the $1.34 average of 23 analysts’ estimates compiled by Bloomberg.
Net income dropped to $112 million, or $1.11 a share, from $127.1 million, or $1.01, a year earlier, a reflection of higher interest and debt-extinguishment costs. Revenue was little changed at $1.3 billion and missed projections of $1.31 billion.
Wynn Resorts’ Las Vegas revenue rose 12 percent to $388 million, while earnings before interest, tax, depreciation and amortization gained 30 percent to $110.4 million.
“Solid numbers all around, especially in Las Vegas,” John Kempf, an RBC Capital Markets analyst, said in a note after the release. The “special dividend came in at the low end of our range, but the doubling of the quarterly dividend is more important. This should make the stock more valuable, in our opinion, to income-seeking funds.”
Revenue in Macau, which accounted for 72 percent of sales last year, fell 4.3 percent to $910.5 million, reflecting a shift to mass-market customers as high-rollers spent less. Profit in that market, measured as earnings before interest, taxes, depreciation and amortization, fell 1.3 percent to $292.2 million.
Wynn said he wasn’t concerned about competition from new resorts planned in Macau, where the company is joining others in expanding on the Cotai strip.
“We think that the market is terrific in Macau, and that everybody who’s in business there is going to have good news going forward,” he said.
Per-share profit benefited from a drop in stock outstanding. The company seized a 20 percent stake held by ex-Vice Chairman Kazuo Okada after the board concluded he may have broken anti-bribery laws by extending free rooms and cash to Asian casino regulators.
The Japanese pachinko billionaire, a co-founder of the company, denies the claim and has raised questions about Wynn’s $135 million donation to a Macau university foundation.
The company is scheduled to hold its annual shareholder meeting Nov. 2 in Las Vegas.