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Wynn Resorts Earnings Beat Estimates as Macau Revenue Surges
By Christopher Palmeri Jan 30, 2014 4:44 PM PT 0 Comments Email Print
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WYNN:US201.517.64 3.94%
Wynn Resorts Ltd. (WYNN), the casino company controlled by billionaire Steve Wynn, reported fourth-quarter earnings that beat analysts’ estimates as revenue in Macau surged. The shares rose in extended trading.

Profit increased to $2.27 a share, excluding items, compared with the $1.75 average of 22 analysts’ estimates compiled by Bloomberg. Revenue gained 18 percent to $1.52 billion, the Las Vegas-based company said in a statement today. Analysts on average had projected $1.44 billion.

“Results were primarily driven by strong mass market revenues in Macau, which we view favorably, given that it is a more stable and higher-margin business,” said John Kempf, an RBC Capital Markets LLC analyst in a research note today.

Sales in Macau, Wynn Resorts’ biggest market, rose 25 percent to $1.12 billion in the quarter. Gambling industry revenue in the enclave, the only part of China where casinos are legal, increased 24 percent in the fourth quarter to $12.5 billion, according to the Gaming Inspection and Coordination Bureau there.

The company’s Las Vegas business posted a 2.4 percent gain in revenue to $400 million. It benefited from higher room rates and an increase in convention business, Wynn said on a conference call today. Results in that market in 2014 would be equal or better, he said.

‘Very Satisfying’

Net income rose to $213.9 million, or $2.10 a share, from $111.4 million, or $1.10, a year earlier.

“The numbers speak for themselves,” Wynn, 72, said. “For two hotels to have cash flow of $1.8 billion and change is very satisfying.”

Las Vegas Sands Corp., the world’s largest casino company, reported yesterday that revenue in Macau climbed 28 percent to $2.53 billion in the fourth quarter and sales in Las Vegas rose 25 percent to $385.7 million.

Wynn Resorts is building a $4 billion resort on the Cotai Strip, the Asian equivalent of the Las Vegas Strip. The resort will open in January 2016, Wynn said today. The company will complete a second phase of the project two years later that could bring total spending there to $9 billion, he said.

It will add another 1,500 hotel rooms, all of which will be suites with massage rooms and 80-inch television sets, Wynn said.

Wynn Resorts’ shares climbed as much as 5.2 percent to $211.98 in extended trading. They closed up 3.9 percent to $201.51 in New York. The stock has gained 63 percent in the past 12 months compared with 19 percent for the Standard & Poor’s 500 Index.

To contact the reporter on this story: Christopher Palmeri in Los Angeles at [e-mail]