Wynn Resorts reports $27M profit for 1Q

Apr 29, 2010 3:19 PM

Casino operator Wynn Resorts Ltd. (WYNN) did better than expected in the first quarter, benefiting from higher revenue in Las Vegas as well as China, and it turned a profit in contrast with a loss a year earlier.

The Las Vegas-based company said Thursday that it earned $27 million, or 22 cents per share, for the period that ended March 31. That's compared with a loss of $33.8 million, or 30 cents per share, a year earlier.

Wynn Resorts' revenue in Macau, the Chinese gambling enclave, increased 31.6 percent, and revenue in Las Vegas rose 9.3 percent, the company said. Total revenue was $908.9 million, compared with $740 million a year earlier.

Analysts polled by Thomson Reuters expected Wynn to earn 14 cents per share on revenue of $850 million.

The company's first-quarter revenue in Macau was $590.6 million, compared with $448.7 million a year earlier.

Wynn Resorts CEO Steve Wynn told investors on a conference call that the explosive growth of gambling in Macau results from a growing desire for consumer experiences among middle-income and wealthier Chinese people.

"To a great extent is it encouraged by the government, which is trying to enhance the consumer economy in (China)," Wynn said. "So it is not considered improper to want, to aspire to the good life. And to Chinese people part of the good life is going to Macau and partaking of all of the excitement and all of the activities that take place there."

Wynn said he planned to spend more time there and have the company's chief financial officer do the same. He said Wynn's next resort - to be built in the Cotai area of Macau - includes plans for moving the company's headquarters to Macau.

But Wynn said he did not expect to move all his corporate employees and their families across the Pacific Ocean.

"I don't intend to uproot everybody that works for me and move them to Macau," he said.

The company's gambling revenue in Las Vegas rose 18.8 percent to $139.5 million for the quarter, while non-gambling revenue there fell 1.4 percent to $225.2 million.

Hotel room revenue fell 8.8 percent to $77.6 million as average nightly rates dropped 8.6 percent to $203 from the 2009 quarter's average of $222.

Revenue per available room, a key metric for hotel and lodging companies, fell in Las Vegas but rose in Macau.

The results released Thursday did not include the company's newest resort, the Encore at Wynn Macau, which opened last week with 410 suites. With that addition, Wynn now has 1,224 slot machines and 467 gaming tables in Macau.

Wynn said its total debt as of March 31 was $3.3 billion.

Its board of directors approved a dividend of 25 cents per common share, payable May 26 to those who hold stock as of May 12.

Shares of Wynn Resorts were up $1.05 to $94.20 in aftermarket trading, after closing the day at $93.15, up 4.9 percent.