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Howard Stutz

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Wynn revenues dip, but profits up in Q3

29 Oct 2014

By Howard Stutz
LAS VEGAS -- Wynn Resorts, Limited said Tuesday the company had a 1.4 percent dip in revenue in the third quarter, but results from the casino operator’s Strip properties boosted profits.

Wynn said its net income for the quarter that ended Sept. 30 was $191.4 million, or $1.88 per share. A year ago, the company reported net income of $182 million, or $1.79 per share.

Analysts polled by FactSet research expected the company to earn $1.83 per share in the third quarter.

Total revenue for Wynn Resorts in the quarter was $1.37 billion, compared with $1.39 billion in the same quarter a year ago. The company said net revenue from its two Macau casinos fell 5.6 percent while revenue from Wynn Las Vegas and Encore Resort at Wynn Las Vegas increased 9 percent.

“Generally speaking, we were happy with the third quarter,” Wynn Resorts Chairman Steve Wynn said on a conference call with analysts.

In Macau, the company’s two casinos had revenue of $942.3 million as the market faced many issues, including a crack down by the Mainland Chinese government on corruption, an unsettled economy, and political unrest in Hong Kong.

Still, Wynn told analysts the company remained “bullish” on Macau.

He said the company continues to make progress on the $4.1 billion Wynn Palace on the Cotai Strip region. Wynn said the 1,700-room hotel-casino project is expected to open in the first half of 2016.

Wynn said the outset of the conference call that he was unsure when business prospects might return in Macau, which has experienced four straight months of gaming revenue declines.

“I don’t know if it’s a squall or if we’re in the rainy season,” Wynn said. “Things happen in China on their own pace and on its own time. It’s interesting to see how the business community responds to the central government. They are very responsive to the mood of the central government.”

Wynn Macau President Ian Caughlan told analysts the smoking ban than took affect on Macau casino floors this month “was the least of the concerns in the market.”

Wynn said he was happy with the company’s performance in Las Vegas during the three months, which included a 10.5 percent increase in gaming revenue and a 7.2 percent increase in hotel room revenue. The company’s revenue per available room at the Las Vegas properties increased 8.2 percent during the quarter.

During the conference call, Wynn updated investors on the company’s progress in Massachusetts. In September, Wynn Resorts was awarded the gaming license for the Boston area and plans to build a $1.6 billion hotel-casino complex in the town of Everett.

State gaming regulators requested that the company redesign the hotel-casino for the 30-acre former Monsanto Chemical Co. site along the Mystic River across from Boston.

Wynn told investors the designs for the casino were “different from any casino presentation” offered by the company.

“I’ve never been as excited about a project as we are about Boston in my 40 years in gaming,” Wynn said.

The company has donated $1 million to the coalition leading the effort to defeat a Massachusetts ballot question that would repeal the state’s 2011 casino law.

Wynn said he “had a nice conversation” with former Democratic Rep. Barney Frank, who wrote an op-ed piece in the Boston Globe that sided with the casino industry and rejected calls to repeal the casino law.

Shares of Wynn Resorts, traded on Nasdaq, Tuesday closed up $1.58, or 0.86 percent, at $185.25.

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