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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Macau hotel lifts Wynn Resorts' profits

25 July 2008

LAS VEGAS, Nevada -- Macau saved Wynn Resorts during the second quarter.

The slumping Las Vegas economy drove down revenue at the company's Wynn Las Vegas for the three months that ended June 30. But results from Wynn Macau offset the losses.

Wynn Resorts, which previewed earnings July 10 to give investors some insight into the company's prospects, said Thursday it had net income of $272 million, or $2.42 a share, in the quarter, compared with $89.6 million, or 82 cents per share, a year ago.

The results were boosted by a $140.7 million deferred tax benefit that was recorded during the quarter. Without the tax benefit, earnings would have been $124.3 million, or $1.11 per share.

Analysts polled by Thomson Financial expected earnings of 93 cents a share.

Company revenue was $825.2 million, up 20 percent from $687.5 million a year ago.

Wynn Las Vegas had its gaming revenues decline to $120.7 million from $159.4 million a year ago. Nongaming revenue grew less than 1 percent in the quarter while hotel revenues declined 3.1 percent. Cash flow at the casino, reported as earnings before interest, taxes, depreciation and amortization, was $81.1 million in the quarter, down from $115.3 million a year ago.

Wynn Macau, however, boomed in the quarter, growing revenues 33 percent and cash flow 67.5 percent.

The casino generated net revenues of $529.9 million, compared with $352.5 million a year ago. Cash flow was $155.2 million, compared with $92.7 million a year ago.

Wynn Resorts has begun building the $700 million Encore at Wynn Macau, which is expected to open in 2010.

The company announced earnings after trading closed on the Nasdaq National Market, where shares of Wynn fell $8.22, or 8.24 percent to close at $91.59. Shares jumped immediately about 5 percent in after-hours trading soon after earnings were announced but fell back below the company's closing price later in the day.