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Best of Chris Sieroty

Gaming Guru

Chris Sieroty
 

Revenue growth in Macau helps drive Wynn Resorts earnings

25 October 2013

LAS VEGAS -- Wynn Resorts, Limited, the gaming company founded and controlled by Steve Wynn, posted third-quarter earnings Thursday that topped analyst estimates by 14 cents, as its Macau resorts drove the revenue growth.

The Las Vegas-based company reported third-quarter earnings of $182 million, or $1.79 per share, compared with net income of $112 million, or $1.11 per share for the same period last year.

Analysts surveyed by Yahoo Finance expected Wynn Resorts to earn $1.65 per share.

Revenue rose to $1.39 billion, compared with $1.29 billion in the third quarter of 2012. Wynn Resorts revenues also surpassed the consensus estimate of $1.36 billion.

In Macau, net revenues were $997.6 million, a 9.6 percent increase from the $910.5 million generated in the third quarter last year. Wynn Resorts said net revenues in Las Vegas increased 1.1 percent from $388 million to $392.5 million.

Wynn Resorts’ profitable quarter comes as it competes for licenses to build casino-resorts in Pennsylvania and Massachusetts. If selected, the company plans to invest more than $2 billion in both projects.

“We’ll bring our brands to those cities,” Wynn told analysts Thursday in a conference call. “It will help us increase our database in Las Vegas … add an extra $15 million to $20 million in EBITDA (earnings before interest, taxes, depreciation and amortization) here.”

But the veteran gaming executive expressed his frustration with the regulatory process.

“We are dealing with a freshman regulatory agency … their preoccupation is that a gangster might get in,” Wynn said.

He said building Wynn resorts in Boston and Philadelphia was about creating a “new domestic company” — Wynn America — that would build metropolitan hotels and casinos. Wynn said he wasn’t interested in riverboat gambling, describing most regional casinos as “homely.”

Overall, Wynn said the company was 13.4 percent ahead of last year in terms of revenues, with Macau up $117 million and Las Vegas ahead by $54 million.

Wynn told analysts that Wynn Palace in Cotai was on schedule to open during Chinese New Year in 2016. He said they “were planning phase two for Cotai” as well as watching Japan and other countries in Asia for possible opportunities.

“During the third quarter … we invested approximately $109.9 million in our Cotai project, taking the total investment to date to $519 million,” Wynn Resorts said in a quarterly earnings release.

But it was questions from analysts concerning Wynn Resorts’ projects in Everett, Mass., and suburban Philadelphia that launched Wynn into a rant about the problems of expanding his gaming company domestically.

Wynn also described Wynn Resorts as “primarily an Asian company.” He said Wynn Resorts “intends to stay an Asian company primarily.”

Wynn told analysts that Caesars Entertainment Corp. being dropped from a casino venture at Suffolk Downs was “unexpected.” He said he was “flabbergasted” by the decision.

Caesars Entertainment was dropped Friday over doubts it would pass its mandatory state background check. Wynn described the regulatory process as the most “challenging company situation that I’ve ever faced.”

As for what’s next in Massachusetts and Pennsylvania, Wynn was unsure, saying he wasn’t entirely comfortable with the process. He said his company was being asked to invest billions of dollars, but it seems “if they are doing us a favor.”

Wynn said if his company were in another industry regulators would roll out the red carpet.

“If you’re in the gaming business, there’s kind of a crummy assumption that you might be unsavory,” Wynn said. “And that burns me up.”

Shares of Wynn Resorts of Wynn Resorts gained $6.39, or 3.84 percent, to $172.85 on modest volume of 1.39 million shares traded on the Nasdaq. In after-hours trading, Wynn shares lost $4.15, or 2.40 percent, to $169.50.
Revenue growth in Macau helps drive Wynn Resorts earnings is republished from Online.CasinoCity.com.