by Ray Poirier | In a preliminary announcement of its second quarter, Wynn Resorts Ltd. (WYNN) said Thursday that its business in Las Vegas had dropped dramatically while its one casino in Macau continued to do well.
Investors accepted the news well and coupled with the announcement of a $500 million stock buyback, to be added to a previous$1.2 billion stock purchase plan, the shares of Wynn shot upward on Friday morning.
However, the euphoria didn’t last long, nor did it do much to help other gaming stock. By day’s end, Wynn shares closed at $78.14.
The Wynn announcement indicated that the company expected operating income for its Las Vegas property to be between $18 and $22 compared to the $63.4 million recorded in the second quarter of 2007.
But in Macau, the company said quarterly operating income was expected to be between $100 million and $106 million, easily topping last year’s $53.2 million.
The company said it would release the official figures on July 24.
Meanwhile, out of Hong Kong came a report that the company had hired three financial advisors to help put together a $3 billion stock offer with the shares to trade on the Hong Kong market. The funds would be used to pay the construction costs of Macau Encore, the second WYNN hotel/casino the company is building in Macau. The property is scheduled to be completed in 2010.
As a group, gaming stocks continued their downward slide last week, causing more analysts and commentators to suggest that, with the economic slowdown the country is experiencing, attendance at Las Vegas casinos would suffer.
Particularly hard hit was MGM MIRAGE Inc. (MGM) which saw its stock price drop more than $5 after the company announced that Tracinda Corp., a company that fronts for billionaire Kirk Kerkorian’s investments, was placing 50 million MGM shares as collateral with Bank of America (BAC).