Wynn Resorts credits strong revenue, tax gain for profits

Wynn Resorts Ltd., owner of Wynn Las Vegas, Encore and properties in Macau, on Thursday attributed revenue growth at its casinos worldwide and a tax gain for a jump in profits in the fourth quarter.

Net income was $190.5 million, or $1.52 per share, in the three months ended Dec. 31, compared with $113.7 million, or 91 cents per share, for the fourth quarter of 2010. Adjusted earnings per share were $1.55 in the quarter.

Revenues in the fourth quarter rose 8.9 percent to $1.34 billion from $1.23 billion. Much of the increase was attributed to a 9.1 percent increase in revenue at Wynn Macau, which generates a majority of the Las Vegas-based casino operator's earnings. Wynn Resorts also reported an income-tax gain of about $31 million in the last three months of 2011.

Wynn Resorts' net income for the fourth quarter easily beat estimates of $1.29 per share of analysts polled by Yahoo Finance.

However, fourth-quarter revenues were just shy of the $1.36 billion analysts expected. That small shortfall sent Wynn Resorts shares down $3.98, or 3.3 percent, to $116.80 after-hours, on the Nasdaq Global Select Market. That erased a gain of $3.03, or 2.57 percent, to $120.78 in the regular session.

On a conference call with analysts, Chairman Steve Wynn had little to say about his high-profile legal dispute with Kazuo Okada, the former vice chairman of Wynn's board of directors and founder of Universal Entertainment Corp.

Okada, who owns nearly 20 percent of Wynn Resorts stock, filed a lawsuit in Clark County District Court last month seeking access to company financial records. He has questioned expenditures in Macau, including a $135 million corporate donation to a university there, and has proposed his own slate of directors in upcoming elections.

Wynn attributed the dustup with his single biggest shareholder to his company's rejection of Okada's request for financial backing to develop a casino in Manila.

"We wish him well," Wynn said. "We have a sharp disagreement with our colleague with regards to the Philippines."

Wynn said Okada was told his Manila Bay project was not an appropriate business for the company, and that the decision, which was "unanimous by the board," created a problem for Okada.

Okada's Universal Entertainment broke ground last month on the $2 billion Manila Bay resort, but the development isn't mentioned in his lawsuit.

Okada's Universal Entertainment, through its Aruze USA subsidiary, sued Wynn Resorts, saying Wynn has refused to release financial information to him even though he has invested $380 million in Wynn Resorts since 2000.

Wynn told analysts that Okada may proceed with his Manila project, "but he does it without the organizational support or financial support of the company he invested in.

"We respect Mr. Okada's opinion," Wynn said. "He has to take full responsibility for his company. I will take full responsibility for my company and that's the way it will remain."

District Judge Elizabeth Gonzalez has scheduled a Thursday hearing on the lawsuit.

For the year, Wynn Resorts earned $613.4 million, or $4.88 per share, compared with $160.1 million, or $1.29 per share, in 2010.

Revenues for 2011 jumped 25.8 percent to $5.26 billion, compared with $4.18 billion a year earlier.

Wall Street expected revenue of $5.29 billion and earnings of $5.33 per share.

Macau at 31.2 percent and Las Vegas with 14.2 percent each showed double-digit revenue growth last year.

Wynn said he was told by state gaming regulators that the $776 million in revenue generated by his Las Vegas properties last year was a record, beating the previous record of $764 million set by Wynn Resorts in 2007.

"It was a good year," Wynn said.

As for its Cotai project, Wynn told analysts "nothing much had changed" as the company continues to finalize the project's scope, timeline and budget.

Wynn Resorts declared a quarterly dividend of 50 cents per share to be paid March 1 to shareholders of record on Feb. 16.

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.