Wynn Resorts Earnings Miss Estimates on Vegas Shortfall
Net income fell to $140.6 million, or $1.23 a share, from $173.8 million, or $1.39, a year ago, Las Vegas-based Wynn said today in a statement. Excluding items, profit of $1.33 a share missed the $1.41 average of 21 estimates compiled by Bloomberg.
Revenue declined 8.1 percent in Las Vegas to $362.8 million. Casino revenue dropped 19 percent, the company said. Wynn does more of its business in Macau, where sales rose 9.8 percent to $951 million, according to the statement. Wynn recently gained government approval for a new resort there.
Earnings before interest, taxes, depreciation and amortization would have been as much as $18 million higher in Macau had the company experienced a normal win rate in its casino, Wynn, the company’s chief executive, said on a conference call today. Last year’s winning percentage in Las Vegas was the highest he’d ever seen.
“The comparative metrics look strange,” he said.
Industry gambling revenue in Macau rose 26 percent to 99.3 billion patacas ($12.4 billion) in the fourth months through April, according to the Gaming Inspection and Coordination Bureau Macau.
Wynn’s revenue for the quarter rose 4.2 percent to $1.31 billion, missing analysts’ projections of $1.34 billion. Revenue totaled $1.26 billion in last year’s first quarter.
In February, Wynn redeemed a 20 percent stake in the company at an almost $800 million discount from Japanese billionaire Kazuo Okada after the board declared him unsuitable to remain an investor. Okada denied the charges and sued the company for breach of contract.
Wynn called the Okada suit “mostly foolish” and said he will fight in court “with great gusto.” In response to a question, Wynn said settling would be up to Okada.
“It is a very serious question for him,” Wynn said.
This quarter, Wynn Resorts will release designs and a cost estimate for its new casino in Macau, which will take more than three years to build, the CEO said.
The company had “some big days,” including a one-day gross of $30 million in the wake of the April 11 opening of Las Vegas Sands Corp. (LVS)’s Sands Cotai Central resort as customers came to town to see the new property, Wynn said.
Wynn fell as much as 3.2 percent to $121.16 in extended trading after results were announced. The stock lost 1.7 percent to $125.19 at the close in New York and has gained 13 percent this year.
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