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A 91% Decline in Wynn Resorts Profits are no Cause for Concern:
Still Produce a Profit and Company Shares Surge After Report

By Howard Stutz, Las Vegas Review-JournalMcClatchy-Tribune Regional News

Aug. 4, 2009--A 91 percent decline in quarterly net profits didn't concern Wynn Resorts Ltd. investors, analysts or even company Chairman Steve Wynn.

The results still equaled a profit.

"It wasn't star-studded, but it was better than most people thought," Wynn said Thursday as the casino operator reported earnings for the second quarter that ended June 30.

Falling gaming revenue and costs associated with the December opening of the $2.3 billion Encore affected the company's bottom line.

Wynn Resorts said its profits in the quarter were $25.5 million, or 21 cents per share. In the same quarter a year ago, the company earned $272 million, or $2.42 a share. Analysts polled by FactSet Research expected Wynn to lose 1 cent a share.

A year ago, Wynn Resorts' second-quarter results were helped by a deferred tax benefit that accounted for more than half of the company's profits.

In a conference call with analysts, Wynn said business in Macau and Las Vegas seemed to be stabilizing over the past quarter and the company benefited from several cost-cutting measures implemented at the beginning of the year.

"The things that we put into place to save money contributed to the performance of the company," Wynn said.

Quarterly revenue declined 12.3 percent, to $723.3 million from $825.2 million.

Still, investors were not put off by the numbers.

Wynn Resorts shares gained more than 14 percent in value on the Nasdaq National Market at one point Thursday. They closed at $50.15, up $5.84, or 13.18 percent.

Analysts were also looking past the quarter and toward the future. Wynn is completing the $650 million Encore at Wynn Macau, which will have 400 suites, four villas, casino space, restaurants and retail shops. It is expected to open by next summer.

"The results appear to be solid in both markets from a profitability perspective, despite the lower volume levels," Oppenheimer gaming analyst David Katz told investors. "We remain focused on the outlook commentary from management as both markets remain in critical stages of transition."

During the second quarter, gaming revenues from Wynn Las Vegas and Encore were $124.3 million, compared with $120.7 million a year ago.

At Wynn Macau, overall revenues were $410.4 million, compared with $529.9 million a year ago.

Wynn spent much of Thursday's conference call touting the opening of Wynn Macau next year and lambasting the White House and Washington, D.C., lawmakers over their handling of the economic crisis.

He did say that business seemed to pick up somewhat in July.

"I'm feeling optimistic," Wynn said. "We've seen some of the Asian business in Las Vegas popping somewhat."

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.

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Copyright (c) 2009, Las Vegas Review-Journal

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