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Wynn Third-Quarter Profit Rises on Macau Gambling (Update2)
By Beth Jinks
Oct. 30 (Bloomberg) -- Wynn Resorts Ltd., the biggest U.S. casino company by market value, said third-quarter profit rose 14 percent as increased gambling in Macau made up for declines in Las Vegas.
Net income jumped to $51.1 million, or 49 cents a share, from $44.7 million, or 41 cents, a year earlier, Las Vegas-based Wynn said today in a Business Wire statement. Revenue gained 18 percent to $769.2 million, beating the $741.7 million average estimate of 13 analysts surveyed by Bloomberg.
The results may signal that billionaire Stephen Wynn's company, with its high-end gambler reputation, has seen business deteriorate less than his rivals. Gambling revenue on the Las Vegas Strip has declined for eight straight months. Wynn set aside more money to cover bad loans made to gamblers in the weakening economy.
``They're not bullet-proof, but probably better positioned than most,'' Joel Simkins, an analyst at Macquarie Securities USA Inc. in New York, said before the results were released.
Wynn rose 49 cents to $46.99 at 7:30 p.m. New York time after U.S. markets ended regular trading. That followed a 13 percent increase in Nasdaq Stock Market composite trading today before the announcement. Wynn stock has fallen 59 percent this year.
Profit excluding one-time items was 62 cents, beating the 59-cent average estimate of 17 analysts surveyed by Bloomberg.
The three biggest U.S. casinos -- Wynn Resorts, MGM Mirage and Las Vegas Sands Corp. -- have lost more than half their stock market values on investor concern that the frozen credit markets will jeopardize the multibillion-dollar development projects they're all planning.
Encore Plans
Wynn said today its casino resort Encore Las Vegas is still scheduled to open in December as planned. The $2.3 billion property is fully financed, it said. The company expects to open its $700 million Encore Macau in the first quarter of 2010.
Las Vegas Sands' third-quarter earnings before interest, taxes, depreciation and amortization and other items, or adjusted Ebitda, fell to $70.1 million in the third quarter, from $93.2 million, as it held less bets and increased its bad debt reserve by $11.1 million.
At Wynn Macau, adjusted Ebitda rose 15 percent to $106.3 million, from $92.8 million a year ago. Wynn boosted its bad debt reserve there by $11 million.
This year through yesterday, Wynn's Ebitda ``made slightly more of an increase in China than the decrease in Las Vegas,'' Steve Wynn said on a conference call with analysts. ``As we go into these last 60 days, we've got a few million dollar cushion to end up sort of like last year.''
`Better Than Most'
Wynn Las Vegas ``fared better than most'' in the third quarter, the division's President Andrew Pascal said on the call. Revenue fell 3.5 percent to 6 percent through September, and there was more ``significant softening'' in October, he said.
``I think that right now Las Vegas is seeing pretty much some of the worst of it,'' Steve Wynn said. ``People will relax and return to their habits, sooner I think than later.''
The company's earnings in Macau were boosted by a 36 percent jump in gambling by VIPs, defined as those who spend at least 1 million patacas ($125,000) each visit. Wynn won 3.1 percent of the $13.3 billion gambled at its Macau VIP tables, up from 2.96 percent of the $9.8 billion bet a year earlier.
Those wealthy gamblers, who are ferried to casinos by junket operators for a commission from the chips they bet, accounted for 67 percent of Macau's total gaming revenue last year, up from 63 percent in 2006, according to the city government.
`Some Weakening'
Macau ``showed some weakening,'' the unit's President Ian Coughlan told analysts. With October rebounding, ``we're looking towards the rest of the year being off a little bit, but not too consequential,'' he said.
Mass-market gamblers bet 20 percent more at Wynn's Macau tables, and the casino won 20.3 percent of the $568.8 million they wagered.
Wynn Resorts opened the Wynn Macau casino in September 2006 and is developing the Diamond Suites, scheduled to open in 2010, and a third Macau casino.
Industrywide, Las Vegas Strip casino gambling revenue slid 6.7 percent this year through August, headed for its biggest annual decline on record. Airlines carried fewer passengers while consumers battled falling home values, job losses and the worst financial crisis since the Great Depression.
The revenue Wynn gets for each available room at Wynn Las Vegas, a measure of rates and occupancy called Revpar, fell 4 percent in the quarter, to $261.
Slots Drop
Wynn Las Vegas slot machine gambling dropped 12 percent to $853.8 million in the third quarter. Table game betting climbed 12 percent to $531 million, while the casino ``hold,'' or the amount the company keeps, fell to 24.3 percent of the amount gambled from 26.4 percent.
Growth in Macau has slowed since China increased visa restrictions on some mainland residents traveling to the former Portuguese colony. Casino gambling revenue there fell to 26 billion patacas ($3.28 billion) in the third quarter from 28.9 billion patacas in the second.
Macau accounted for more than half of Wynn's revenue in 2007, up from 21 percent in 2006, according to data compiled by Bloomberg. |
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发表于 2008-11-3 04:58
