Gaming companies still struggle

For the second straight quarter, results from its casino in Macau lifted Wynn Resorts Ltd. to an increase in profits.

The company, which also operates Wynn Las Vegas and is planning a December opening for the neighboring $2.3 billion Encore, told investors it earned $51.1 million, or 49 cents a share, in the third quarter ended Sept. 30. The figures surpassed the third quarter of 2007, when Wynn Resorts earned $44.7 million, or 41 cents a share. Analysts polled by Thomson Reuters expected the company to earn 58 cents a share in the quarter.

Revenue rose 17.7 percent, to $769.2 million from $653.4 million.

Wynn Macau, which grew gaming revenues almost 27 percent to $474.8 million in the quarter, helped the company overcome a down quarter at Wynn Las Vegas, where casino revenues fell 4.6 percent and nongaming revenues declined 1.1 percent.

As the company has done on previous earnings conference calls, Wynn Resorts executives focused on items other than quarterly results.

The company touted its balance sheet, which shows Wynn Resorts with $1.7 billion in cash on hand and a $500 million revolving line of credit. The company needs to spend $500 million to complete the 2,034-room Encore and will spend $500 million more next year to finish the 400-room Encore at Wynn Macau.

"We can pay off our debt maturities in three years and still have money left over," Wynn Resorts Chief Financial Officer Matt Maddox said.

With liquidity issues a key topic during earnings season, Wynn Resorts Chairman Steve Wynn was asked several times by analysts if he would use the company's excess cash to purchase a competing Strip casino.

"No, we don't want to buy anything," Wynn said. "There is nothing we see that we want to own. We have plenty to keep us busy."

Wynn spent a good part of the conference call discussing Encore. The company announced this week that it was accepting hotel room reservations starting Jan. 12 at $329 a night. Wynn was evasive when quizzed about Encore's customer base.

"I don't want to add to any of my neighbors' woes, but our market share will increase in Las Vegas," Wynn said.

Although a few details about Encore's interior design have surfaced, such as large glass windows that allow casino customers to look out onto the resort's grounds, Wynn didn't hold back with the platitudes.

"It's the prettiest thing we've ever done. If that sounds like developerspeak, it is," Wynn said.

Wynn said the company is not making plans to redevelop its Las Vegas golf course site or build a resort on the casino site it controls on the Cotai Strip of Macau anytime soon.

"I don't need another casino right now," Wynn said. "Our focus over the next 12 or 13 months is delivering the hotels we currently have under construction."

Shares of Wynn Resorts closed at $46.50 on the Nasdaq National Market, up $5.45, or 13.28 percent.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.