Wynn Resorts profit on the rise thanks to Vegas bump, but Macau growth slows

Wynn Resorts Ltd., the casino company run by billionaire Steve Wynn, reported first-quarter profit that beat analysts’ estimates, helped by gains in Las Vegas.

Excluding some items, profit was $2.03 a share, beating the $1.55 average of 24 analysts’ estimates, according to data compiled by Bloomberg. Revenue rose 5 percent to $1.38 billion, matching forecasts of $1.38 billion.

Net income rose 44 percent to $203 million, or $2 a share, from $140.6 million, or $1.23, a year earlier, the Las Vegas- based company said today in a statement.

Wynn Resorts, which owns casinos in Las Vegas and Macau, is recovering from a slowdown in China last year and more competition for high rollers there. In Las Vegas, casino revenue rose 12 percent to $176.3 million in the first quarter on higher table winnings.

“Results were well above consensus,” analysts at RBC Capital Markets LLC led by John Kempf said in a note to clients. “Las Vegas numbers were solid given concerns of a weak first quarter,” wrote Kempf, who has an outperform, or buy, rating on the stock.

Adjusted property earnings before interest, taxes, depreciation and amortization in Las Vegas rose 19 percent to $120.4 million. In Macau, they rose 14 percent to $330.7 million.

In the Chinese city, the company’s revenue rose 4.4 percent to $992.1 million, on higher winnings from mass-market table games and slot machines. Betting on table games in the VIP segment fell 15 percent while revenue in the mass-market category rose 14 percent.

Market share

Wynn Resorts has lost market share in Macau in recent years as rivals such as Las Vegas Sands Corp. and Galaxy Entertainment opened properties. The company’s market share stood at 10.8 percent last year, down from a recent high of 15.9 percent in 2008, according to data from Bloomberg Industries.

“The offerings being made are keeping us on our toes,” Wynn, the company’s chairman and chief executive officer, said on a conference call today. “They’re triple-smart people and it’s keeping us on our game.”

The shares were little changed in extended trading. They increased 2.6 percent to $134.91 at the close in New York, taking their gain for the year to 20 percent, compared with a 11 percent rise for the Standard & Poor’s 500 Index.

Snorting smoke

The company is building a $4 billion resort on the Cotai Strip in Macau that is scheduled to open in 2016. Wynn said he hoped to soon reveal model photos of the project, which will feature gondolas shaped like dragons, snorting smoke.

The 71-year-old billionaire said the company is pursuing hotel-casinos in Toronto, Boston and Philadelphia while taking a more cautious approach to online gambling, which has been legalized in Nevada, New Jersey and Delaware.

“I’ve often thought online gaming was getting everyone jazzed up, a little ahead of itself,” Wynn said. “It’s very difficult to distinguish yourself online. We sell experiences in our buildings. I don’t know how to make the experience on a computer screen particularly unforgettable.”

Wynn said on the conference call that baccarat and roulette made up 70 percent of the company’s table game revenue in Las Vegas, largely from overseas customers.

When asked what the effect would be if Chinese gamblers stopped coming to Las Vegas, Wynn said it would be “roughly the equivalent of the building falling down.”

Editors: Ben Livesey, Stephen West. To contact the reporter on this story: Christopher Palmeri in Los Angeles at [email protected]. To contact the editor responsible for this story: Anthony Palazzo at [email protected].