Wynn Resorts Ltd.
) reported second quarter 2012 adjusted earnings of $1.38 per
share, lagging the Zacks Consensus Estimate of $1.48 as well as
prior-year earnings of $1.60. On a GAAP basis, earnings per share
were $1.37 versus 97 cents in the comparable quarter last year.
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Net revenue plunged 8.4% year over year to $1,253.2 million,
missing the Zacks Consensus Estimate of $1,326.0 million. Weedy
performances both at Las Vegas and Macau hit Wynn Resorts badly in
Net revenue at Wynn Macau was $907.6 million in the quarter, down
7.1% year over year, due to a decline in both VIP table and mass
market table games.
The table games turnover in the VIP segment declined 7.2% from the
prior-year period to $30.3 billion. VIP table games win was 2.79%
based on turnover, down from the expected range of 2.7% to 3.0% as
well as the year-ago level of 2.89%.
Table games in the mass market category also decreased 2.7% year
over year to $671.8 million. However, the mass market table games
win rate was 29.8%, which was higher than the expected range of 26%
to 28% and year-earlier rate of 27.8%.
Average daily rate (ADR) at Wynn Macau was $317, slightly up from
$314 in the year-ago quarter. The property's occupancy level was
tweaked to 90.0% from 90.5% in the prior-year quarter. Combining
both the effects, revenue per available room (REVPAR) nudged up
0.4% year over year to $286.
Wynn Resorts currently comprises 504 tables (290 VIP tables, 203
mass market tables and 11 poker tables) and 939 slot machines in
Las Vegas Operations
Wynn Resorts' revenue from Las Vegas operations took a deeper
plunge of 11.6% year over year to $345.6 million as net casino
revenue tumbled 37.7% from the prior-year period to $98.6 million.
However, gross non-casino revenue increased 5.5% year over year to
$290.7 million, buoyed by improved revenues from the hotel and food
and beverage segments, offset somewhat by lower retail and
During the quarter, Wynn recorded a 5.6% year-over-year increment
in room revenues. Average daily rate (ADR) rose 5.6% to $254, but
occupancy slipped to 87.6% from 89.2%. Both the matrices led to
REVPAR growth of 3.8% to $222.
At the end of the quarter, Wynn Resorts' total cash balance was
$1.9 billion. Total debt outstanding was $5.5 billion.
Economic slowdown both at China and the U.S. dampened Wynn Resorts'
second-quarter 2012. Less discretionary spending by VIPs in Macau
in response to the global economic turmoil faded the strong casino
momentum in Mainland China. Moreover, the competitive environment
is heating up at both marketplaces. The company faces stiff
competition from peers like
Las Vegas Sands Corp.
MGM Resorts International
However, we remain hopeful on the company's ability to execute in a
difficult operating environment. Wynn is still to explore the
Chinese market with its Cotai project.
Wynn Resorts currently retains a Zacks #3 Rank that translates into
a short-term Hold rating. We are maintaining our Neutral
recommendation on the stock over the long term.