A bit of a slowdown in second-quarter gaming was expected but a sharp drop in table game hold was not. Yet, these were the factors that affected the quarterly earnings of Wynn Resorts Ltd. (WYNN).
The company reported that second quarter earnings rose to $148.1 million or $0.137 per share compared to the previous year when earnings were $122 million or $0.97 per share.
Revenue fell to $1.25 billion from $1.37 billion in 2011.
Analysts had expected earnings to be $1.51 per share on revenue of $1.34 billion.
During a conference call, Chairman and CEO Steve Wynn said the Macau casinos had experienced a great deal of volatility in table game hold both last year and this. However, last year’s hold benefited the company while this year’s lower hold cut into the company’s profits.
Also affecting Macau business, he noted was the increase in competition, particularly as Las Vegas Sands Corp. opened its Cotai Central complex. He said he wasn’t criticizing the competition for increasing their comps since they found it necessary for their business operations.
“Competition has made everybody sharpen their knives. It’s healthy in the long run; challenging in the short run. But we understand this. We wait until we see something real and then we deal with it. Which maybe makes us a little slower sometimes, but we’re not sleepy. Were just careful,” he explained.
The quarterly report indicated that overall revenue in Macau slipped 7 percent while in Las Vegas it fell 12 percent.
The slowdown is not expected to affect the company’s plans to build a $4 billion resort on the Cotai Strip.
Wynn Resorts was the first of the major gaming companies to report its quarterly experience. Others that have announced dates include:
Las Vegas Sands Corp. (LVS), Wednesday, July 25, following the close of the market.
MGM Resorts International (MGM), Tuesday, Aug. 7, before the market opens.
Boyd Gaming Corp. (BYD), Tuesday, July 24, at 9 a.m. PDT.
Bally Technologies Inc. (BYI), Thursday, Aug. 9 after the close of the market.
Dover Downs Gaming & Entertainment Inc. (DDE), Thursday, July 26, at 6:30 a.m. PDT.
Nevada Gold & Casinos Inc. (UWN), Friday, July 27, at 5:30 a.m. PDT.