Stay informed with the
NEW Casino City Times newsletter!
MACAU AND LAS VEGAS, Nevada -- The $900 million sale of a valuable subconcession in Macau saved the third quarter for Wynn Resorts Ltd.
The company, which operates Wynn Las Vegas and a recently opened casino in the Chinese enclave, said Tuesday that its net income for the three-month period ended Sept. 30 was $715.7 million, which translated into earnings per share of $6.43. A year ago, the casino operator reported a net loss of $9.2 million, or 9 cents per share.
Excluding the subconcession sale and other one-time charges, Wynn would have reported an adjusted loss of $1.3 million, or 1 cent per share. Analysts polled by Thomson First Call expected earnings of 6 cents a share during the period.
The subconcession sale to Publishing and Broadcasting Ltd. allows the Australian company controlled by the family of the late tycoon Kerry Packer to build a casino in Macau.
Wynn Resorts generated $318.1 million in revenue during the quarter, a 26.5 percent increase from $251.4 million in the same period a year ago.
Company Chairman Steve Wynn spent much of an hourlong conference call with analysts and investors discussing the challenges of operating the company's new Macau casino.
"We could make a fuss over the numbers if we wanted to," Wynn said. "But we don't want to be gloating or anything like that."
Wynn Resorts announced its earnings at 3 p.m. Tuesday, or 6 p.m. on the East Coast. Typically, companies will announce earnings just before the market opens at 9 a.m. Eastern time, or just after the final bell at 4 p.m. Eastern time. However, the nearly dozen Wynn executives participating in the call were strewn across the world, including New York, China and Las Vegas. Wynn was in Tokyo on his way to China.
Wynn Resorts opened the initial phase of the $1.2 billion Wynn Macau on Sept. 6 with 600 rooms and a 100,000-square-foot casino with 212 gaming tables -- primarily baccarat -- and 375 slot machines. In its first 25 days of operation, the property generated revenues of $45 million, more than 81 percent of which came from table games.
The company said $134 million was wagered by mass-market customers on table games and $1.5 billion was gambled by what Wynn referred to as the "VIP segment."
Wynn said the Macau casino was operating disproportionately to its size. In September, the casino had cash flow, or earnings before interest, taxes, depreciation and amortization of $2.3 million. In October, Wynn revealed to analysts that Wynn Macau will earn $19.5 million in cash flow.
He said his management team is learning its way through the Chinese market.
"Suffice to say, our win per unit per day is much higher than our competitors," Wynn said. "In about 90 days, we'll add another 119 more table games. We're really finding our way in the dark here. We are moving ahead in Macau and we are satisfied. This is the steepest learning curve in my 40 years."
Wynn reported $36.8 million in preopening expenses in the quarter, primarily related to Wynn Macau.
At Wynn Las Vegas, the casino generated revenues of $131.9 million in the quarter, compared with $123 million a year ago. The company's table game win per table per day was $7,779, compared to $7,339 a in the 2005 third quarter.
Noncasino revenues at Wynn Las Vegas were $178.4 million, an 8.5 percent increase from a year ago.
On the conference call, Wynn acknowledged that a high-end customer won $15 million gambling at Wynn Las Vegas in August and September. However, he said the casino still held 22 percent of what was gambled.
"We can take a $15 million hit from a player because we have so many of them," Wynn said. "At the end of the day, we can just shrug it off. We want our best customers to win. We got smacked by our best customers in Macau during the first four days we were open."
Wynn Resorts closed trading on the Nasdaq National Market at $74.86, down 39 cents or 0.52 percent.
Copyright GamingWire. All rights reserved.