Wynn Resorts shocks Wall Street with huge Q2 report

August 07, 2007 8:40 AM
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Wall Street was caught completely off-guard Monday when Wynn Resorts Ltd. (WYNN) reported a blowout quarter of $687.5 million in revenues, $89.6 million in net income and $0.82 per share in earnings.

">Suspicion grew during the trading Monday that the report would top last year’s quarterly loss of $0.20 per share. Share price grew $6.33 before closing at $107.39.

But after hours, in fact within minutes of the WYNN announcement, the shares shot up to $120 each.

Up until the recent quarter report from Las Vegas Sands Corp. (LVS), shares affected by the Macau experience were languishing.

Just a few short weeks ago, LVS shares were pummeled by short sellers who forced the share price to fall to the low $70s. But news of the new Venetian Macao facility pushed the shares up to Friday’s closing of $93.75. On Monday, the shares rose to $99.03 each.

But Monday’s quarterly report from WYNN blew the lid off analysts’ estimates. The majority were looking for something in the $0.54 per share range.

And the good news was shared equally by both Wynn Las Vegas and Wynn Macau.

Net casino revenues in the second quarter for Wynn Las Vegas rose to $159.4 million from last year’s $113.5 million. Table game win percentage was 24.2%. Slot machines won $269 per day compared to $240 per day in 2006.

Gross non-gaming revenue was $211.2 million, a 7.5% increase over last year. Average daily room rate was $311 with occupancy at 97%.

In Macau, the net revenue for the period was $352.5 million. Hotel rooms averaged $258 per day with an occupancy rate of 86.2%.

Las Vegas Sands

Las Vegas Sands said that although revenue rose 18.6% to a record $612.9 million in the second quarter, adjusted net income fell 32.4% to $81.9 million or $0.23 per share compared to last year’s $121.3 million or $0.34 per share.

Analysts had forecast earnings per share of $0.25.

President Bill Weidner attributed the decline to higher costs, including $11 million junket commission and labor costs at the Venetian Macao facility.

However, he said those extra costs would disappear once the new property opens on Aug. 28.

For the second quarter, revenue at Venetian Las Vegas rose 14% to $235.5 million while the revenue in Macau was up by 21.6% to $377.4 million.

Analysts were generally enthusiastic following the report, suggesting as one said, "Las Vegas Sands continues to have the most dynamic development pipeline in gaming, with significant projects under construction in Macau, Singapore, Las Vegas and Pennsylvania."

MGM Mirage

Second quarter earnings for MGM Mirage Inc. (MGM) went through the roof due to both revenues from its many properties but especially from profits made on the divestiture of properties and the sales of Las Vegas condominiums.

Net income for the period reached $360.2 million or $1.22 per share, a figure that included $263.9 million in pretax gain on the sale of Primm Valley casinos (to Herbst Gaming) and the Colorado Belle and Edgewater properties in Laughlin, Nev., to a partnership involving Anthony Marnell III.

In the comparable three month period of 2006, the company had earnings of $146.4 million or $0.50 per share.

Continuing operations in the most recent quarter generated income of $182.9 million or $0.62 per share, higher that last year’s $143.3 million or $0.49 per share. Analysts had projected earnings of $0.58 per share.

MGM will join the Macau gaming activities in the fourth quarter of this year when it opens a casino it will own jointly with Pansy Ho.

The quarterly report showed that the Las Vegas Strip properties generated $1.64 billion compared to $1.56 billion in 2006. However, a major increase in revenues was generated by the Mississippi properties where the most recent total was $138.2 million whereas the area last generated only $38.6 million.

Boyd Gaming

Shares of Boyd Gaming Corp. (BYD) fared less bullish last week after the company reported a drop in earnings for the second quarter when compared to last year’s numbers.

For the quarter, the company said adjusted earnings from continuing operations fell to $39.9 million or $0.45 per share compared to last year’s $44.5 million or $0.49 per share.

Investors immediately sold off the shares, dropping the per share price to $41.40.

The company said current year results were hurt by $17 million or $0.19 a share for pre-opening costs related to its Echelon project, a loss on early retirement of debt and other charges.

Analysts had been expecting net income to be $0.47 a share, somewhere in between last year’s income and the amount actually realized.