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Wynn Resorts reports strong increase in revenues

Wynn Resorts Ltd. posted earnings that beat analysts’ expectations and reported strong growth in both Las Vegas and Macau in the first quarter.

The Las Vegas-based company also said it will pay a dividend of 50 cents per share, doubling last year’s dividend. The dividend will be payable May 17 to stockholders of record May 3.

Wynn Resorts earned $173.8 million, or $1.39 a share, for the quarter ended March 31, up from $27 million, or 22 cents a share, a year earlier.

Net revenue rose 38.6 percent to $1.26 billion from $908.9 million.

Wynn Resorts attributed the increase to a 46 percent jump in revenues in Macau and a 24 percent increase in Las Vegas.

Analysts polled by Yahoo Finance had expected earnings of 72 cents a share on net revenue of $1.14 billion.

“As is the case, from time to time the casino gets lucky. That was the case” with first-quarter earnings, Wynn Resorts CEO Steve Wynn told analysts on a conference call Tuesday.

Wynn said business continued to improve in Las Vegas, which has been a trend the gaming company began to notice last year with its year-end earnings. He said the company also raised its room rates in Las Vegas and “had no problem seeing the benefits of investing $200 million in the property.”

Wynn Resorts shares rose 2.15 percent, or $3.13, to $142.06 in after-hours trading Tuesday on the Nasdaq Global Select Market shortly after the company reported. The price had risen to $143 at
7:30 p.m. PDT.

The company had $1.4 billion in cash and $3.2 billion in debt as of March 31.

Wynn Macau revenues jumped 47 percent in the first quarter on strong growth at the VIP tables and at slot machines, where the handle rose 59.2 percent and win unit per day was up 78.1 percent.

Average daily room rate at Wynn Macau of $307 for the first quarter compared with $282 for the same period a year earlier. Revenue per available room increased 6.3 percent to $272 from $256 a year earlier.

The 2011 results include the addition of 414 rooms with the opening of Encore on April 21, 2010, the company said in a regulatory filing.

Wynn said he expected to receive Chinese government permission to begin construction on the new resort soon. He said he expected the new property to cost between $2.5 billion to $3 billion to complete.

“It’s the culmination of 44 years of experience,” Wynn said of the Cotai project.

In Las Vegas, net revenues from operations were $394.6 million, 24 percent higher than in the first quarter of 2010.

The company said its table-game win percentage was 30.4 percent for the quarter, well above its expected range of 21 percent to 24 percent. And the amount of money dropped to play table games rose 13.8 percent to $634 million.

The company’s nongambling revenue in Las Vegas was up 10.8 percent to $249 million in the first quarter. Average room rates rose 18.2 percent to $240 and the company’s occupancy rate was 87.9 percent.

“While we continue to be impressed with Wynn’s execution in Macau, we remain concerned that expectations for the company have risen tremendously recently,” Credit Suisse research analyst Joel Simkins, said.

Simkins also was seeking additional guidance regarding online gaming legislation, following the collapse of an alliance between Wynn Resorts and PokerStars. The agreement was canceled late Friday after federal prosecutors in New York shut down PokerStars, FullTilt Poker and Absolute Poker for alleged bank fraud, money laundering and operating an illegal gambling business.

Wynn told analysts “poker was as American as apple pie,” and that it seemed “like the intelligent thing to was sit down and regulate” the industry.

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

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