Casino operator Wynn Resorts Ltd. reported a wider first-quarter loss than Wall Street expected on Tuesday after opening a new casino resort on the struggling Las Vegas Strip and seeing revenue slip at its property in Macau.
And while rival MGM MIRAGE told investors Monday that the Las Vegas market may have turned a corner, Wynn's chairman and chief executive, billionaire Steve Wynn, was more cautious.
"I think that the economy is bouncing around," Wynn said during a conference call with investors. He noted that some metrics — like occupancy and the booking window — have been stronger in Las Vegas in recent weeks.
|Las Vegas billionaires: riches to rags?|
|Wynn Resorts Reports 4Q Loss of $159.6 Million|
|Casino revenues still in freefall|
|Also Check out our Race & Sports Section|
Investors, however, were more optimistic, sending Wynn's shares up $6.14, or 14.3 percent, to $48.95 in afternoon trading. The stock has traded between $14.50 and $119.74 during the past 52 weeks.
Las Vegas-based Wynn lost $33.8 million, or 30 cents per share for the period that ended March 31. That compares with profit of $46.7 million, or 41 cents per share, a year earlier.
Wynn Resorts cautioned that earnings from its Las Vegas properties are not comparable to the prior year because the Encore at Wynn Las Vegas casino had just opened in December. The previous year's Las Vegas earnings included only the performance of Wynn Las Vegas.
Excluding some nonrecurring items related to property charges and debt repayment, the casino operator lost 27 cents per share. Analysts surveyed by Thomson Reuters, who generally exclude one-time items, on average predicted profit of 2 cents per share.
Wynn said its revenue dropped 5 percent to $740 million, missing Wall Street's forecast of $742.6 million.
Operating costs and expenses, meanwhile, rose nearly 4 percent during the quarter to $712.8 million.
In a note to investors, Robert LaFleur of Susquehanna Financial Group attributed Wynn's worse-than-expected performance to higher operating expenses associated with opening Encore. He said Wynn Macau's results, however, were better than he anticipated, mostly because hold percentages — the amount won by the casino as a percentage of the total amount wagered — were higher than normal.
"All in, the results reflected the challenges affecting Las Vegas and the challenge of ramping up a property in the current environment, with Macau being helped by strong table hold," the analyst said.
Wynn's overall revenue in the Chinese enclave fell 9 percent to $448.7 million in the quarter as the resort's occupancy rate weakened.
Wynn Resorts had $4.8 billion in total outstanding debt at the end of the quarter, including about $2.8 billion for Wynn Las Vegas, $1.6 billion for Macau and $375 million under a term loan agreement.
During the call, Wynn said the company may consider buying assets from another casino owner, but a deal is not currently in the works. MGM has said it is considering selling assets to improve its liquidity and strengthen its balance sheet.
"We are open for business," Wynn said. "We don't think that we are on fire to by something at the moment. But we do know what's going on in the industry and we keep our eyes open and we have a lot of flexibility."
Question? Comment? E-mail the staff at: Staff of GamingToday