July 29, 2014 - 1:36 pm
Wynn Resorts Ltd.’s second quarter results were saved by the company’s Las Vegas resorts.
Company Chairman Steve Wynn said Tuesday that won’t happen again.
During an early morning conference call with analysts and investors — Wynn handled the call from his offices in Macau — the casino executive said the Chinese gaming enclave as a whole was bouncing back after suffering its first monthly gaming revenue decline in June.
Wynn said his company’s two Macau casinos — Wynn Macau and Encore at Wynn Macau — were enjoying a record July. High-end play returned and any loss in that segment was being supplemented by increased volume in mass market table game play.
And, Wynn said the current business volume makes him confident the company will see a healthy return on the under-construction $4 billion Wynn Palace, that is expected to open by Chinese New Year in 2016 on the Cotai Strip region.
“We build houses of brick, which takes longer than some of the others, but they’re built for the long term,” Wynn said.
Wynn Resorts, which operates Wynn Las Vegas and Encore on the Strip, said its companywide net income for the quarter that ended June 30 was $203.9 million, or $2 per share. A year ago the company’s net income was $129.8 million, or $1.28 per share.
Wynn Resorts said net revenue grew 6 percent to $1.4 billion.
The company’s revenue from its two Las Vegas casinos was roughly 32 percent of the total figure but grew 12.5 percent to $451.4 million. Revenue from the company’s two Macau casinos was $960.7 million, but just a 3.2 percent increase over the same quarter of 2013.
On the conference call, Wynn said the company’s Macau casino results during the quarter — a 43.3 percent increase in mass market table game revenue and a 14.1 percent increase in slot machine revenue — came despite a portion of the Wynn Macau being closed for a $60 million renovation.
“We want to be able to present a fresh property by the next Chinese New Year, a year before we open Wynn Palace,” Wynn said.
Credit Suisse gaming analyst Joel Simkins told investors “the headline figures in Macau are disappointing,” but added the Las Vegas numbers “are congruent with our checks that the Vegas recovery continues.”
Wells Fargo analyst Cameron McKnight said Wynn missed revenue estimates from Macau because high-end gambling trends were weak during the quarter.
“Nonetheless, we remain bullish on the medium to long-term secular growth story as Macau is still significantly under-penetrated,” McKnight told investors.
In Las Vegas, Wynn Resorts said casino revenue from the two resorts increased 28 percent to $182.5 million while revenue from hotel rooms grew 7.3 percent to $107.9 million. The two Strip resorts grew food and beverage revenue by 1.8 percent while retail, entertainment and other revenue increased 3.1 percent.
Macquarie Securities gaming analyst Chad Beynon said Wynn’s overall net revenue in Las Vegas “was impressive.”
In answering analyst questions about Las Vegas, Wynn said his two Strip resorts were “pushing $50 million this month” is cash flow.
“I never had a $50 million in July in my business career, 40 odd years in gaming,” Wynn said.
He told analysts he wanted the Las Vegas casinos to have more than $500 million in cash flow in 2014.
“We’re feeling up about Las Vegas,” Wynn said. “But we’re privileged to be part of the Macau scene.”
Shares of Wynn Resorts closed at $217.41 on the Nasdaq Tuesday, up $6.44 or 3.05 percent.
Contact reporter Howard Stutz at email@example.com or 702-477-3871. Follow @howardstutz on Twitter.