Boyd Gaming Corp. and Wynn Resorts Ltd. reported today that their third-quarter profits fell as the weak economy, higher credit costs and other factors took a toll on the casino operators’ revenue.
Las Vegas-based Boyd said gamblers continued to spend less at its properties, and warned that it doesn’t expect to restart construction of its $4.8 billion Echelon resort in Las Vegas for three to five years.
"While visitation levels remained fairly constant, spend per visitor continues to be down significantly year-over-year, as consumers are still being cautious with their spending," CEO Keith Smith said in a statement.
In the three months ended September. 30, Boyd earned $6.3 million, or 7 cents per share. That’s off 28 percent from the $8.7 million, or 10 cents per share, from a year ago.
Adjusted profit was 9 cents per share, which accounts for a $14.4 million gain related to an insurance settlement that offset a $13.5 million impairment charge related to a joint venture with Morgans Hotel Group at Echelon.
Revenue declined 7 percent to $398.2 million from $426.5 million, missing Wall Street’s $411.2 million estimate.
While Boyd was less promotional, it was not enough to combat the ongoing pullback in consumer spending. Gaming revenue dropped 5.6 percent to $332.1 million, while revenue from food and beverage fell 7 percent to $55.7 million. Room revenue declined 9 percent to $30.1 million.
Wynn Resorts’ third-quarter profit slid 33% due to higher interest costs and a lower income-tax provision benefit, which more than offset higher revenue and operating margins.
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Nonetheless, Wynn posted a profit of $34.2 million, or 28 cents a share, down from $51.2 million, or 49 cents a share, a year earlier. Excluding items such as property charges and pre-opening costs, earnings fell to 33 cents from 62 cents. Net revenue increased 0.5% to $773.1 million.
The casino operator, which has a stronger balance sheet than most of its rivals, recently raised $1.87 billion in its initial public offering of Wynn Macau Ltd. There has been great optimism on the region’s prospects – despite concerns about travel restrictions to the gambling enclave and competition from casinos in Singapore.
Still, Wynn’s efforts to reduce costs and debt, along with its Macau IPO, has been praised by two major ratings agencies, which raised their outlooks on the company’s junk-territory credit ratings. Total debt outstanding as of Sept. 30 was $4.1 billion, down 16% from a year earlier but flat from the prior quarter.
Overall casino revenue declined 4.3%, while food and beverage revenue jumped 25%. Entertainment, retail and other revenue climbed 3.2%.
In Las Vegas, revenue at Wynn was up 10%. Non-casino revenue jumped 18% on higher hotel and food and beverage revenue from the Encore resort. Macau revenue was down 5.5%, hurt by a 12% decrease in table-game winnings.
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