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Wynn Resorts pre-announces quarterly earnings; shares rise 13 percent

In a move to soften the blow, Wynn Resorts Ltd. told investors Friday its Macau gaming operations had a horrible fourth quarter, which drove down the company’s overall results in the three-month period.

The casino company pre-announced its figures for the quarter that ended Dec. 31, saying the revenue produced by its two Macau casinos could be down as much as 27 percent. However, revenue from Wynn’s two Strip resorts grew as much as 4 percent.

Wynn Resorts said in a statement the figures were “preliminary” and still subject to review by the company’s internal finance team and outside auditors.

Wynn said its net revenue from Macau were expected to range from $552 million to $560 million, compared to $761.2 million generated in the 2014 fourth quarter of 2014. In Las Vegas, net revenue was expected to be in the range of $387 million to $395 million, compared to $376.8 million in the 2014 period.

Net income from Macau was expected to range from $75 million to $83 million, compared to $157.6 million for the fourth quarter of 2014. Las Vegas’ net income is expected to be in the range of $56 million to $64 million, compared to $51.6 million a year ago.

Analysts pointed out that the preliminary results were actually better than most expected and could also hope to boost the company’s stock price, that is off some 25 percent so far this year. On Friday, with overall market plunging more than 2 percent, Wynn shares closed at $58.37 on the Nasdaq, up $6.87 or 13.34 percent.

In December, the company announced that Chairman and CEO Steve Wynn spent $63.8 million to acquire more than 1 million shares of stock in the company. He spent between $62 and $64 per share.

“We wouldn’t be surprised if he wants to buy more,” Morgan Stanley gaming analyst Thomas Allen told investors. “Pre-announcing would end the blackout period as he would no longer be restricted by knowing material nonpublic information.”

Macau’s overall gaming market hit a five-year low in 2015 with casino revenue declining 34.3 percent to $28.93 billion. Macau has been slowed by the sinking Chinese economy and government reform programs that crushed the high-end gambling business. December marked Macau’s 19th straight monthly gaming revenue decline.

“The questions will largely relate to the rationale behind this decision,” said Deutsche Bank gaming analyst Carlo Santarelli. “We think the company, and individuals are looking for optionality, and potentially the ability to buy in stock here.”

Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski said Wynn’s preliminary results “reflect some firming in Macau trends, particularly on the mass (market) side.”

Wynn is building the $4.1 billion Wynn Palace on the Cotai Strip region of Macau, which is expected to open in June, one of three new resorts being constructed by Las Vegas-based casino operators that are opening this year.

Credit Suisse gaming analyst Joel Simkins said the Macau gaming market may be stabilizing while Las Vegas is “firmly recovering.” However, he said there are “concerns around the impact of new supply and our view that investors have not properly accounted for this new capital.”

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Find @howardstutz on Twitter.

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