Wynn Resorts’ Profit Trails View on Macau Dip; Dividend DoubledChristopher Palmeri
Wynn Resorts Ltd., the casino company controlled by billionaire Steve Wynn, posted fourth-quarter profit that fell short of analysts’ estimates as business in Macau declined. The company doubled its dividend.
Profit excluding some items totaled $1.17 a share in the quarter, the Las Vegas-based company said yesterday in a statement. Analysts were projecting $1.27, the average of 22 estimates compiled by Bloomberg.
The casino operator is struggling to adjust to a decline in high-roller business at its Macau properties and a small increase in mass-market play. So-called VIPs spent 6.6 percent less at the tables, the company said, while other customers boosted theirs by 1 percent. Competition from rivals such as Las Vegas Sands Corp. and Galaxy Entertainment Group Ltd. was fierce, according to Wynn, the company’s chief executive.
“Murder tough,” Wynn said on a conference call following the release. “Those guys have blood in their eye.”
Wynn Resorts said it will double the quarterly dividend to $1 a share, payable Feb. 28 to investors of record on Feb. 14. The company also paid a special dividend of $7.50 a share in November ahead of an increase in U.S. tax rates.
Wynn Resorts was little changed in extended trading. The stock rose 1.4 percent to $125.22 yesterday in New York and returned 11 percent in 2012, including dividends.
Fourth-quarter net income fell 41 percent to $111.4 million, or $1.10 a share, from $190.5 million, or $1.52 a share, a year ago, when Macau was growing faster and Las Vegas was bouncing back from a two-year slump. The company gets about 70 percent of its revenue from Macau, with the rest from Nevada.
Fourth-quarter sales declined 4.1 percent to $1.29 billion, the company said, beating the $1.27 billion average of analysts’ estimates.
Las Vegas Sands this week reported better-than-expected fourth-quarter sales on faster growth in gambling in Macau following the opening of a new resort.
Wynn outlined steps he’s taking to combat the competition in Macau, including a high-limit slots area to be completed later this year and a $4 billion resort under construction on the Cotai Strip. That property, which opens in 2016, will greet visitors with air-conditioned gondola rides across a lake with fountains, he said.
The 71-year-old billionaire also explained his vision for “Urban Wynn” properties with high-end hotels and restaurants, as well as casinos. The company is seeking licenses in Philadelphia and Boston. Wynn said he would like to build in other cities, from London to Houston, should opportunities become available.
The company is locked in a legal fight with Japanese billionaire Kazuo Okada over its seizure of his 20 percent stake in the company for a $1.9 billion promissory note payable in 10 years. Wynn Resorts said Okada made improper payments to Philippine gaming regulators.
Okada, who is fighting the redemption in court, questioned a donation the company made to a Macau university.