Wynn Resorts reports earnings
On Tuesday, the Las Vegas-based casino operator reported more normal earnings, which showed the value of the company's growing Macau gaming hub.
With a full quarter of results from the 600-room Wynn Macau, the company's overall revenue for the quarter that ended Sept. 30 more than doubled, coming in at $653.4 million, up from $318.1 million last year.
Wynn Resorts, which operates Wynn Las Vegas on the Strip, said it earned $44.7 million during the quarter, or 41 cents a share. The number was a sharp decrease from $715.7 million, or $6.43 a share, which reflected sale of the subconcession for $900 million. Without that sale, Wynn would have lost $1.3 million or a penny a share in the 2006 third quarter.
Analysts polled by Thomson Financial had expected Wynn to earn 63 cents a share.
The company announced earnings after the close of trading on the Nasdaq National Market. Shares of Wynn closed at $167.90, down $5, or 2.89 percent. After the earnings release, shares fell an additional 4.5 percent during after hours trading.
Wynn Macau clearly drove the company's quarterly results. The casino on the Macau Peninsula generated net revenues of $347.7 million and cash flow of $92.8 million.
On a conference call with analysts and investors following the release of earnings, Wynn Resorts Chairman Steve Wynn said casino will be expanded by the middle of January to have approximately 380 tables games, 100 more than a year ago, and 1,200 slot machines, more than double the opening number.
Wynn said an additional 400 luxury hotel suites are under construction and will open in 2010.
Wynn also previewed its plans for a 52-acre site on Cotai Strip, saying the company was designing a villa-style, all-suite hotel with between 1,500 and 2,000 units.
"We will occupy the whole property," Wynn said. "By our own hyperbolic nature, we will build the most beautiful hotel on Earth on our property. End of statement."
Wynn also deflected suggestions from analysts that the company might partner with business entities in Macau that have land available for development, but lack a gaming concession. He said Wynn Resorts "is not a joint venture kind of company."
While the company touted Macau, Wynn officials didn't discount Wynn Las Vegas. Casino revenues during the quarter were $149.9 million, almost 14 percent higher than the same quarter a year ago. Nongaming revenue was $193.1 million, more than 8 percent above the figure reported a year ago.
Wynn also previewed the $2.2 billion Encore, under construction next to Wynn Las Vegas. The 2,034-room all-suite hotel will have rooms larger than Wynn Las Vegas and the casino will resemble the Wynn Macau, where the large gaming area is divided and separated by half walls and chambers to give customers greater intimacy.
"We approached the design of Encore with new information in mind," Wynn said. "There will be some things no one has ever seen on the Strip before. It won't look like Las Vegas. There will be natural light everywhere and it will be fascinating to see what the reaction will be."
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