Macau lifts Wynn Resorts Ltd. (WYNN) profits

Apr 25, 2011 7:48 PM

Yes, Las Vegas table game dealers at Wynn Resorts Ltd. (WYNN) played lucky in the first quarter of 2011, holding a phenomenal 30.4 percent, but a Hong Kong gaming analyst may have best described the reason for the company’s success with the explanation, "Wynn Macau is the best proxy of Macau…Its casinos offer superior customer experiences, which lengthen play."

That probably explains the company’s success in the quarter ended on March 31. In a report last week, the company said revenues climbed 39 percent to $1.26 billion and net income reached $174 million or $1.39 per share.

The actual numbers crushed estimates by gaming analysts, which were in the range of $1.15 billion in revenue and earnings of $0.72 per share.

Fueling the improvements were a revenue increase of 47 percent in Macau, helped by the addition of a new property that opened in April of 2010. Macau’s quarterly revenue rose to $865.7 million compared to $590.6 million a year earlier.

Also improving were the statistics from the company’s two Las Vegas properties. Revenue was up 24 percent with non-gambling revenues showing an improvement of 10.8 percent.

Room rates rose 18.2 percent to an average of $240 while the occupancy rate was 87.9 percent.

The quarterly report sent investors scurrying to jump on the bandwagon. At one point, the share price hit $150 each but fell back a bit with some profit taking. At the close of business on Thursday (the markets were closed on Good Friday), WYNN shares were selling at $147.71 each.