Wynn Resorts reports $33.8 million loss in first quarter


A week after expressing optimism about Las Vegas' economic recovery, Wynn Resorts Chairman Steve Wynn was more guarded Tuesday.

The operator of Wynn Las Vegas and Encore took a $33.8 million loss in the first quarter, due in large part to lousy results at the company's Macau casino.

During Wynn Resort's conference call with analysts and investors, analysts were more focused on discussing whether or not Las Vegas was coming out of the economic doldrums that has plagued the gaming industry since last year.

"Our weekends are getting stronger," Steve Wynn said. "I'm cautiously optimistic we're seeing the bottom of this thing."

At the Milken Institute's Global Conference last week in Beverly Hills, Calif., Wynn said the market had been showing some signs of stabilization. On Monday, MGM Mirage executives expressed similar observations.

On Tuesday, he was more restrained in his outlook.

"The MGM guys were pretty ebullient yesterday," Wynn said. "I'm going to be a little reticent. The economy is bouncing around. We're still unsure if (President Obama's) stimulus package is taking hold."

Wynn, who touted his 40 years of experience in operating casinos and building resorts for helping him better understand customers, said people generally want to return to "normal behavior" after tragic events.

But Wynn wasn't ready to say that action on the Strip is back to past levels.

"We'll see a return in consumer confidence when and if the public thinks Washington is spending money wisely," Wynn said. "Consumer confidence is important to what happens in Las Vegas."

The company's troubles in the quarter that ended March 31 were mainly due to Macau. Revenues in the Chinese gaming market fell almost 9 percent. Wynn operates the Wynn Macau and is building a $700 million resort that is expected to open in 2010.

Overall, Wynn's net loss translated into a loss of 30 cents per share. A year ago, Wynn Resorts reported net income of $46.7 million, or 41 cents per share. Analysts polled by FactSet Research were expecting Wynn to earn 1 cent a share.

Companywide revenue declined 5 percent to $740 million, compared with revenue of $778.7 million in the first quarter of 2008.

The revenue decrease came despite three months of operation at the $2.3 billion Encore, which opened Dec. 22.

Even with the net loss, shares of Wynn Resorts traded up on the Nasdaq National Market, closing at $50.10, up $7.29 or 17.03 percent.

"Wynn remains the strongest operator and has the best assets in its group," Oppenheimer gaming analyst David Katz told investors. "The valuation remains a challenge in our view, given the Las Vegas fundamentals."

With about $1.7 billion in available cash and two equity offerings complete, questions were focused on Wynn Resorts potentially buying a Strip casino from one of the company's competitors.

Steve Wynn said he understands why his company is viewed as a potential buyer, but a transaction is not in the offing and the company is not aggressively looking for another property.

"We're open for business but we're not on fire to buy something at this moment," Wynn said. "It would have to be a deal that was beneficial for both parties. We might be a (buyer), which is something I've never done. But there is no deal cooking, nothing of that sort."

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

 

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