Wynn's New Macau Casino Delivers Forecast-Topping ProfitBy
Casino benefited from return of high-stakes players to enclave
CEO gets board OK to build lake, meeting space in home turf
A new casino in Macau paid off nicely for Wynn Resorts Ltd.
The company founded by Steve Wynn reported first-quarter results that easily topped analysts’ forecasts, benefiting from the new Wynn Palace in the Chinese gambling enclave and improvement in its home market of Las Vegas.
Wynn shares surged 5.7 percent to $125 at 6:57 a.m. in New York in pre-market trading. Before Wednesday, the stock was up 32 percent in the past 12 months.
Profit for Wynn Resorts excluding some items grew to $1.24 a share, beating the 98-cent average of analysts’ estimates. Revenue jumped by almost half to $1.48 billion, the company said Tuesday in a statement, also topping forecasts.
Macau is bouncing back from a three-year slump triggered by a Chinese government crackdown on corruption that prompted high rollers to shun the casinos. Gambling revenue in the region rose 13 percent to $7.92 billion in the first quarter, the strongest growth since a recovery began last August.
“You can see the numbers, business is good for us,” Wynn said on a conference call, adding that he saw a “resurgence of activity at the top end in China.”
Wynn Macau’s adjusted property earnings increased 53 percent to $293 million, above the consensus of $254 million reported by Union Gaming. The Wynn Palace reported earnings of $112 million.
Wynn in particular benefited from the return of VIP players, who generated a larger increase in revenue in the quarter than mass-market bettors industry wide.
Wynn Resorts got off to a slow start with the $4.2 billion Wynn Palace, which opened in Macau last August. Construction around the resort impeded access, executives said last year.
A new casino under construction in Boston will cost $2.4 billion, the company said Tuesday, up from the original $1.6 billion projection in 2014. Additional meeting space and higher-than-expected bids contributed to the increase, the executive said.
The 75-year-old entrepreneur said the board approved plans to spend $400 million to $500 million building a lake and meeting center behind Wynn’s Las Vegas casinos. Construction could begin in December. Wynn said he was holding off on a planned 2,000-room hotel on the property until he sees how the first wave of additions perform.
The CEO is convinced new attractions in Las Vegas, such as the planned move of the Oakland Raiders football team, will enhance the city’s long-term appeal as a tourist destination.
“This town is a real safe bet,” he said.
— With assistance by Daniela Wei