Wynn Resorts profits fall under pressure from Macau operations

Macau’s slumping casino market contributed to a 72 percent decline in profits at Wynn Resorts Ltd. in the second quarter.

Company Chairman Steve Wynn said the weakness in high-end baccarat business, which has caused Macau’s overall gaming revenue to decline in each of the past 13 months, is starting to hurt the company’s business in Las Vegas.

“We’re the operator of choice for the international baccarat business,” Wynn said on a conference call with analysts Wednesday to discuss results for the quarter that ended June 30. “When that group diminishes, we suffer the most.”

Wynn said its two resorts in Macau brought in revenue of $617 million, a 35.8 percent decline compared to a the same quarter a year ago. The figure accounted for almost 60 percent of the company’s $1.04 billion in total revenue during the quarter.

The revenue declines cause Wynn’s overall net income to dip to $56.5 million, or 56 cents per share. A year ago, the company’s profits were $203.9 million, or $2 per share. Overall, Wynn’s total revenue fell 26.3 percent.

Wynn Macau saw its cash flow decline 43.5 percent in the quarter and the company cited “weakness in the gaming segment” as the primary reason for the drop.

“Macau continues to be more of a question than a certainty,” Steve Wynn said.

Meanwhile, revenue from Wynn’s two Strip resorts declined 6.2 percent in the quarter to $423.5 million. Casino revenue in Las Vegas was $134.7 million, a 26.2 percent decrease. The company saw increases in its nongaming businesses in Las Vegas, including a nearly 1 percent hike in hotel revenue, a 8.7 percent increase in entertainment and retail revenue and 4.8 percent jump in other revenue.

“In Las Vegas we have a comfortable business,” Steve Wynn said. “We are enjoying noncasino revenue that is acceptable. Our base business tends to be pretty steady.”

Wynn’s stock price has tumbled almost 56 percent percent from its 52-week high of $219.20. Shares closed Wednesday on the Nasdaq at $96.03 down $1.98 or 2.02 percent.

In an investors note before the earnings call, Union Gaming Group analyst Christopher Jones said were three things needed to be done to boost the company’s value — stability in its quarterly dividend, an optimistic look at Las Vegas and margin structure in Macau.

“With our long-term thesis primarily predicated on the opening of Wynn Palace on Cotai, we recognize the road to that opening will be bumpy given the headwinds currently persisting in Macau,” Jones said.

In a statement, Wynn Resorts announced a 50 cents per share dividend for the quarter.

On the development front, Wynn said the company is moving forward with its $4.1 billion Wynn Palace project on Macau’s Cotai Strip, which is expected to open on March 25.

However, a $1.7 billion resort project in Everett, Mass., has been stalled. The company was awarded a gaming license last November.

Wynn told analysts the investment was the largest for a single project ever seen in the state.

“We build resorts and we are bringing to Boston a destination resort,” he said. “”Hopefully, they will treat us with softer hands. It will feel good when they stop hitting us.”

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

ad-high_impact_4
Business
AGS partners with Vegas Golden Knights
AGS is the nation’s second-largest manufacturer of Class II slot machines used primarily in tribal jurisdictions. It announced a marketing partnership with the Vegas Golden Knights NHL team. (Las Vegas Review-Journal)
Lehman Brothers bet big on Las Vegas
Lehman Brothers collapsed 10 years ago, helping send the country into the Great Recession.
Fremont9 opens downtown
Fremont9 apartment complex has opened in downtown Las Vegas. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
Ross & Snow launches in Las Vegas
Luxury shoe brand Ross & Snow has opened in Las Vegas, featuring "functional luxury" with premium shearling footwear. (Bailey Schulz/Las Vegas Review-Journal)
Remote Identification and Drones
DJI vice president of policy and public affairs discusses using remote identification on drones. (Bailey Schulz/Las Vegas Review-Journal)
Drones and public safety in Nevada
Two representatives in the drone industry discuss UAV's impact on public safety. (Bailey Schulz/Las Vegas Review-Journal)
Frontier Airlines to launch flights from Las Vegas to Mexico
Frontier, a Denver-based ultra-low-cost carrier, will become the first airline in more than a decade to offer international service to Canada and Mexico from Las Vegas when flights to Cancun and Los Cabos begin Dec. 15. (Rick Velotta/Las Vegas Review-Journal)
MGM Resorts International CEO Jim Murren addresses Oct. 1 lawsuits
MGM Resorts International Chairman and CEO Jim Murren addresses criticism his company has received for filing a lawsuit against the survivors of the Oct. 1 shooting. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International opens the doors on MGM Springfield
Massachusetts’ first hotel-casino opens in downtown Springfield. The $960 million MGM Springfield has 252 rooms and 125,000-square-feet of casino. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International prepares to open MGM Springfield
Las Vegas-based MGM Resorts International gave news media and invited guests a preview of the $960 million MGM Springfield casino in Massachusetts. The commonwealth's first resort casino will open Friday, Aug. 24. (K.M. Cannon/Las Vegas Review-Journal)
A Walk Through Circus Circus
It only takes a short walk through Circus Circus to realize it attracts a demographic like no other casino on the Strip: families with young children. (Todd Prince/Las Vegas Review-Journal)
Morphy Auctions, a vintage slot machines seller, wants gaming license
Vice president Don Grimmer talks about Morphy Auctions at the company's warehouse located at 4520 Arville Street in Las Vegas on Thursday, Aug. 16, 2018. (Rick Velotta/Las Vegas Review-Journal)
Nevada's venture capital money doesn't stay in state
Zach Miles, associate vice president for economic development for UNLV, said there’s venture money in Southern Nevada, “but trying to find the right groups to tap into for that money is different.” According to a 2017 report from the Kauffman Foundation, Las Vegas ranked number 34 out of 40 metropolitan areas for growth entrepreneurship, a metric of how much startups grow. With a lack of growing startups in Las Vegas, investment money is being sent outside of state borders. The southwest region of the U.S. received $386 million in funding in the second quarter, with about $25.2 million in Nevada. The San Francisco area alone received about $5.6 billion. (source: CB Insights)
Neon wraps can light up the night for advertising
Vinyl wrap company 5150 Wraps talks about neon wraps, a new technology that the company believes can boost advertising at night. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Nevada on the forefront of drone safety
Dr. Chris Walach, senior director of Nevada Institute for Autonomous Systems, talks to a reporter at NIAS's new Nevada Drone Center for Excellence of Public Safety, located inside the Switch Innevation Center in Las Vegas. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
Motel 8 on south Strip will become site of hotel-casino
Israeli hoteliers Asher Gabay and Benny Zerah bought Motel 8 on the south Strip for $7.4 million, records show. They plan to bulldoze the property and build a hotel-casino. Motel 8 was built in the 1960s and used to be one of several roadside inns on what's now the south Strip. But it looks out of place today, dwarfed by the towering Mandalay Bay right across the street.
Project billed as one of the world's largest marijuana dispensaries plans to open Nov. 1
Planet 13 co-CEO Larry Scheffler talks about what to expect from the new marijuana dispensary, Thursday, July 19, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Oasis Biotech opens in Las Vegas
Brock Leach, chief operating officer of Oasis Biotech, discusses the new plant factory at its grand opening on July 18. (Bailey Schulz/Las Vegas Review-Journal)
UNLV Tech Park innovation building breaks ground
Construction on the first innovation building at the UNLV Tech Park is underway. (Bailey Schulz/Las Vegas Review-Journal)
Caesars Forum Meeting Center
Caesars broke ground Monday on its $375 million Caesars Forum Meeting Center (convention center) just east of the High Roller observation wheel. (Caesars Entertainment)
Technology reshapes the pawn shop industry
Devin Battersby attaches a black-colored device to the back of her iPhone and snaps several of the inside and outside of a Louis Vuitton wallet. The device, installed with artificial intelligence capabilities, analyzes the images using a patented microscopic technology. Within a few minutes, Battersby receives an answer on her app. The designer item is authentic.
Recreational marijuana has been legal in Nevada for one year
Exhale Nevada CEO Pete Findley talks about the one year anniversary of the legalization of recreational marijuana in Nevada. (K.M. Cannon/Las Vegas Review-Journal)
Young adults aren't saving for retirement
Financial advisors talk about saving trends among young adults. (Bailey Schulz/Las Vegas Review-Journal)
TOP NEWS
News Headlines
Add Event
Home Front Page Footer Listing
Circular
You May Like

You May Like