Sands, Wynn shares get Macau boost

Las Vegas Sands Corp. and Wynn Resorts Ltd. shares rose in active trading Monday after Macau gaming officials announced casino revenues jumped 50 percent to a record in October, boosted in part by China's Golden Week holiday.

Las Vegas Sands gained $1.35, or 2.9 percent, to close at $47.23 on heavy volume of 34.37 million shares traded on the New York Stock Exchange. On the Nasdaq market, Wynn Resorts shares climbed $2.10, or 1.96 percent, to close at $109.26 on moderate volume of 2.25 million shares traded.

Total gambling revenue for casino operators in the former Portuguese colony increased to $2.4 billion last month from $1.6 billion a year earlier, according to figures released Monday by Macau's Gaming Inspection and Coordination Bureau.

On a year-to-date basis, gaming revenues in Macau are up nearly 60 percent, Bill Lerner, an analyst with Las Vegas-based Union Gaming Group LLC, said in a research note.

"It's encouraging to see monthly growth of this magnitude," Lerner said. "We believe the profit story for Macau concessionaires over the next year could be significantly higher than current expectations."

He also said the numbers were impressive because of the "remarkably limited new supply" of facilities through 2013. The research note also found Golden Week visitation to Macau increased 13 percent year over year, with about 70 percent of visitation coming from mainland China.

Golden Week combines Chinese Spring Festival and National Day and fell Oct. 1-7 this year.

The revenue figures from Macau were released a day before Wynn Resorts was scheduled to release its third-quarter earnings. In the second quarter of 2010, Wynn Resorts reported total revenues of $1.03 billion, or 52 cents per share.

Revenues were helped last quarter by a 74.1 percent revenue surge from Macau to $714.4 million from $410.4 million last year.

Analysts surveyed by Yahoo Finance expect Wynn Resorts to report third-quarter revenues today of $990.8 million, or 39 cents per share, compared with $773.07 million, or 33 cents per share, for the same period a year ago.

Las Vegas Sands on Oct. 27 reported third-quarter revenues of $1.91 billion, an increase of 67.3 percent compared with $1.14 billion in the third quarter of 2009. Sands China Ltd., a subsidiary of Las Vegas Sands, owns and operates three resorts in Macau.

The company's net income for the third quarter was $168 million, or 21 cents per share, compared to a loss of $123 million, or 19 cents per share, for the same period a year ago.

Shares of MGM Resorts International, which owns and operates MGM Macau, lost 1 cent, or 0.09 percent, to close Monday at $10.92 on average volume of 20.1 million shares traded on the NYSE. Las Vegas-based MGM Resorts is scheduled to announce its third-quarter earnings on Wednesday.

In a preliminary report released Oct. 12, the company said MGM Macau is expected to earn operating income of $61 million in the third quarter of 2010, including a depreciation expense of $22 million, compared with operating income of $50 million for the same period last year. The 2009 third-quarter earnings included a depreciation expense of $23 million.

Overall, MGM Resorts expects to report a loss of 72 cents per share, on net revenue of $1.56 billion, in the third quarter, compared with a loss of $1.70 per share, on net revenue of $1.5 billion, for the same period last year.

Macau, the territory off Hong Kong, became the world's biggest gambling location in terms of revenue in 2006, topping Las Vegas.

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