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Wynn (WYNN) Down 18.6% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Wynn Resorts (WYNN - Free Report) . Shares have lost about 18.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Wynn due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Wynn Resorts' Q1 Earnings & Revenues Top Estimates

Wynn Resorts reported first-quarter 2019 financial numbers, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. While the bottom line outpaced the consensus mark after missing in the preceding three quarters, revenues beat the same for the third consecutive quarter. Despite delivering better-than-expected results, shares of the company declined 4.6% in after-hours trading due to dismal Wynn Macau performance.

Adjusted earnings in the quarter under review came in at $1.61 per share, exceeding the consensus mark of $1.59 but decreased 30% on a year-over-year basis. This downside can be attributed to a decline in operating income from the Las Vegas operations and Wynn Macau, which overshadowed growth in Wynn Palace operations.

Revenues totaled $1,651.5 million, which surpassed the consensus estimate of $1,642 million. However, the top line declined 3.7% due to dismal performance of Wynn Macau and Las Vegas operations.

Concurrent with the earnings announcement, the company declared a quarterly cash dividend of $1.00 per share. The dividend will be payable May 30, 2019, to its shareholders of record as of May 22.

Wynn Palace Continues to Impress

Revenues from Wynn Palace totaled $726.6 million in the first quarter, up 9.1% year over year. Casino revenues summed $623.2 million, up 9.6%. In the VIP segment, table games turnover was $12.63 billion, down 17.9% year over year. VIP table games win rate (based on turnover) was 3.91%, above the expected range of 2.7-3% and also up from 2.60 witnessed in the year-ago quarter. Table drop in the mass market segment was $1.3 billion, up 7.1% from the year-ago quarter. Furthermore, table games win in mass market operations amounted to $315.5 million, up 1.7% year over year.

Non-casino revenues summed $103.4million, up 6.2% from the year-ago quarter. Also, room revenues totaled $43.3 million, up 7.1% from a year ago. Notably, average daily rate (ADR) came in at $271 (up 28.8%), occupancy was 97.2% (up 40 bps year over year) and revenue per available room (RevPAR) was $264 (surged 8.2%).

Wynn Macau Operations

Wynn Macau revenues decreased 15.3% year over year to $523.9 million in the first quarter due to decline in casino revenues. Notably, casino revenues in the reported quarter decreased 16.5% to $450.2 million. Also, table games turnover in the VIP segment declined 40.3% to $10.19 billion. In the meantime, the VIP table games win rate (based on turnover) was 2.90%, within the expected range of 2.7-3.0% and above the year-ago quarter figure of 2.61%. Table drop in the mass market segment was $1.35 billion, up 2.2% year over year. Table games win in the mass market category amounted to $264.5 million, up 3.1%. Non-casino revenues came in at $73.6 million, down 7% year over year. Room revenues were up 1.6% year over year at $28.9 million. RevPAR came in at $288, flat with the year-ago quarter figure. Also, ADR was $290, flat year over year.

Las Vegas Operations

Revenues from Las Vegas operations declined 7.1% year over year to $401 million in the quarter under review. The downside can be attributed to decline in both casino and non-casino revenues. Additionally, casino revenues decreased 17.1% to $111.7 million. Also, table games drop decreased 24.7% to $404.1 million. Meanwhile, table games win declined 27.9% year over year to $111.4 million. Table games win percentage of 27.6% was down from 28.8% in the year-ago quarter but above the projected range of 22-26%.

Total non-casino revenues grew 2.5% year over year to $289.3 million. Room revenues were down 1.9% to $119.1 million. During the quarter, RevPAR dropped 2.1% to $279. Occupancy rate was 82.6% compared with 83.9% in the year-ago quarter. While food and beverage revenues declined 1.8% to $123.6 million, entertainment, retail and other revenues decreased 5.9% to $46.6 million.

Operating Performance

Adjusted property earnings before interests, taxes, depreciation and amortization (EBITDA) decreased 12.3% year over year to $494.8 million on dismal performance by Wynn Macau and Las Vegas operations. In the quarter, adjusted property EBITDA from Wynn Macau summed $163.9 million, down 21.9% year over year. However, the same from Wynn Palace surged 4.8% to $222.6 million. Adjusted property EBITDA from Las Vegas operations decreased 24.1% to $108.3 million.

Cash Position

As of Mar 31, 2019, Wynn Resorts’ cash, cash equivalents and restricted cash totaled $1.83 billion. Outstanding debt at the end of the first quarter amounted to $9.17 billion, including $3.10 billion of Wynn Las Vegas related debt, $3.73 billion of Macau debt and $983 million of Wynn America debt.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

Currently, Wynn has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Wynn has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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