Wynn stock rises despite slumping revenues

Jul 30, 2009 8:36 PM
Staff & Wire Reports |

Steve Wynn (pictured), once called the "Magic Man" on the Las Vegas Strip, continues to work wonders, especially with the financial markets.

Despite posting a net income that was down 91 percent, stock prices in Wynn Resorts Ltd. (WYNN) had its biggest jump in two months.

Wynn advanced $5.26, or 12 percent, to $49.57 this morning on the Nasdaq Stock Market, after surging as much as 16 percent, the biggest intraday gain since May 5. The shares had risen 4.9 percent this year before today.

Excluding some expenses, the profit was 9 cents a share, Las Vegas-based Wynn said today in a statement. Analysts had projected the company to break even, the average of 17 estimates compiled by Bloomberg.

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Overall Las Vegas Strip gambling revenue fell 6.4 percent in May, the smallest drop since September and a cautious sign the worst casino slump on record may be easing. Total revenue in Macau, the only place in China where casinos are legal, fell 12 percent in the second quarter, after the Chinese government restricted some travel to the resort to limit gambling by mainland citizens.

Wynn reported that net income fell 91 percent to $25.5 million, or 21 cents a share, from $272 million, or $2.42, a year earlier, when earnings were boosted by an income tax gain. Revenue dropped 12 percent to $723.3 million. Analysts on average projected $735.9 million.

Las Vegas Gambling Revenue

Overall adjusted property earnings before interest, taxes, depreciation and amortization, an indicator of cash flow, fell 19 percent to $192.7 million, beating the $158.5 million average of 13 analysts surveyed.

In Las Vegas, combined Ebitda fell 7.7 percent to $75.5 million at Wynn’s namesake resort and its neighbor, Encore. Encore opened in December and didn’t contribute to Ebitda last year. In Macau, Wynn’s adjusted property Ebitda fell 24 percent to $117.2 million.

Wynn’s Las Vegas slot-machine gambling fell 1.8 percent to $836.8 million in the second quarter from a year ago, while Wynn’s two resorts won $155 per game a day, down from $232 last year.

Table-game betting was little-changed at $494.8 million. Casino "hold," or the amount the casino won, rose to 20.7 percent of the amount gambled, from 20.4 percent a year ago. That was "slightly below" the property’s expected range of 21 percent to 24 percent, Wynn said.

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