Wynn Resorts second-quarter earnings fall short of estimates

LAS VEGAS -- Wynn Resorts, Limited, the casino company founded by billionaire Steve Wynn, reported a second-quarter profit Monday that fell short of analysts’ estimates as Macau saw revenue grow at a slower pace than in Las Vegas.

The Las Vegas-based company reported second-quarter earnings of $129.8 million, or $1.28 a share, down from $1.38.1 million, or $1.37 a share, a year earlier. Excluding onetime items, such as a $26.6 million debt retirement charge, earnings increased to $1.51 a share.

Revenue rose 6.3 percent to $1.33 billion, helped by a 16 percent increase from Las Vegas operations and a 2.6 percent increase from operations in Macau.

The weak results in Macau were due to hotel renovations that limited the number of available rooms. Analysts surveyed by Yahoo Finance expected earnings of $1.51 a share on $1.33 billion in revenue.

Wynn Resorts operates Wynn Las Vegas and Encore locally. The company posted net revenues of $401.4 million, up from $345.6 million in the second quarter last year.

Casino revenues in the second quarter were $142.6 million, a 44.7 percent increase from the same period last year. Table game win percentage was 21.5 percent within the company’s expected range of 21 percent to 24 percent and above the 15 percent reported for the second quarter of 2012.

Revenue per available room at Wynn and Encore on the Strip was $233.

“We continue to think the Las Vegas Strip market is moving in the right direction,” Brian McGill, an analyst with Janney Capital Markets, wrote in an investors note Monday.

In a conference call Monday, Chairman and CEO Steve Wynn cautioned against interpreting the results in Las Vegas as a sustained recovery from the economic devastation brought by the recession.

“I think we are having a limp-wristed sort of a crawl out of a hole, but a recovery is a more robust word,” Wynn said.

In Macau, net revenues were $930.9 million, a 2.6 percent increase from the $907.6 million generated in the second quarter of last year. The company operates a Wynn and Encore in Macau.

Wynn said 600 rooms are being renovated at the original Wynn Macau, which contributed to a 5 percent reduction in the number of available room night compared with last year.

The company expected the renovations to be completed by the end of the year.

Steve Wieczynski, an analyst with Stifel, said positive notes from the conference call include management saying July is off to a solid start and that Macau hotel room renovations should help support rates over the long term.

Despite missing Wall Street estimates, Wynn Resorts shares gained 29 cents, or 0.22 percent, to close at $131.27 in average trading on the Nasdaq.

Wynn also gave more details about his company’s planned $4 billion casino-resort it’s building on the Cotai Strip in Macau.

Wynn told analysts the 2,000-room resort will be named Wynn Palace. He said the resort, which will open in early 2016, will be reminiscent of the Bellagio and have a floral theme with colorful floats adorning the resort and changing monthly.

Wynn said negotiations have been completed on a final price of $4 billion. In February, the company began its pre-foundation work.

Wynn Resorts spent $113.3 million on its Cotai project in the second quarter. The company has also begun discussions with the government of Macau about renewing its casino concession.

“We think this (Cotai) property will add significant value and estimate it is worth $50 to shares today,” McGill wrote. “We also believe the increased certainty surrounding the timeline and spending is a notable positive.”

Wynn also said a proposed casino-resort in Philadelphia would cost $900 million, while a proposed Boston-area resort would cost $550 million.