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Wynn Resorts (WYNN) Q4 Earnings & Revenues Miss Estimates

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Wynn Resorts, Limited (WYNN - Free Report) reported dismal fourth-quarter 2020 results, with earnings and revenues missing the Zacks Consensus Estimate for the sixth straight quarter. Moreover, the top and the bottom line declined on a year-over-year basis. Following the results, shares of the company dropped 0.6% during after-hour trading session on Feb 4.

Q4 Earnings and Revenues

During the fourth quarter, the company reported an adjusted loss of $2.45 per share, wider than the Zacks Consensus Estimate of a loss of $2.22. In the prior-year quarter, the company had reported adjusted loss of 62 cents per share.

Revenues during the fourth quarter came in at $686 million, missing the Zacks Consensus Estimate of $751 million by 8.7%. The top line also declined 58.5% year over year due to dismal performance by Wynn Palace, Wynn Macau and Las Vegas operations.

Wynn Resorts, Limited Price, Consensus and EPS Surprise

 

Wynn Resorts, Limited Price, Consensus and EPS Surprise

Wynn Resorts, Limited price-consensus-eps-surprise-chart | Wynn Resorts, Limited Quote

 

Wynn Palace Disappoints

During the fourth quarter, Wynn Palace revenues plunged 62.5% year over year to $221.5 million. Casino revenues were $159.8 million, down 67.4% year over year. Rooms; food and beverage; and entertainment, retail and other revenues also declined 54.9%, 36.6%, 12.5%, year over year to $19.5 million, $18.8 million and $23.4 million, respectively.

In the VIP segment, table games turnover was $2,807.1 million, down 69.9% year over year. VIP table games win rate (based on turnover) was 1.97%, below the expected range of 2.7-3%. It was also lower than 3.07% witnessed in the year-ago quarter. Table drop at the mass market segment was $658.5 million, down 47.4% from the year-ago quarter’s reported figure. Furthermore, table games win in mass market operations amounted to $142.3 million, down 54.9% year over year.

During the reported quarter, average daily rate (ADR) was $192 (down 28.4%, year over year). Occupancy was 59.5% (compared with 96.9% reported in the prior-year quarter). Meanwhile, revenues per available room (RevPAR) came in at $115 (down 55.8%, year over year).

Wynn Macau Operations

During the fourth quarter, Wynn Macau revenues declined 65.4% year over year to $181.9 million. The downside was due to a decline in casino, rooms, food and beverage revenues.

Notably, casino revenues in the reported quarter plunged 71.3% year over year to $130.8 million. Rooms and food and beverage revenues declined 44.8% and 31.7% year over year and to $15.6 million and $14.3 million, respectively. During the fourth quarter, entertainment, retail and other revenues rose 4.6% year over year to $21.2 million.

Table games turnover in the VIP segment declined 77.7% to $1,771.8 million. However, the VIP table games win rate (based on turnover) was 3.1%, higher than expected range of 2.7-3.0%. However, it was below 3.27% reported in the prior-year quarter.

Table drop at the mass market segment was $632.5 million, down 54.6% year over year. Table games win in the mass market category was $113.1 million, down 60% year over year.

During the reported quarter, ADR came in at $233 (down 19.9%, year over year). Occupancy also declined to 65.5% compared with 99.3% in the prior-year quarter. RevPAR declined 47.1% year over year to $153.

Las Vegas Operations

During the fourth quarter, revenues from Las Vegas operations plunged 53.2% year over year to $172.5 million due to weak occupancy levels.

Casino and food and beverage revenues fell 0.3% and 67.3% year over year to $75.5 million and $39.3 million, respectively. Rooms and entertainment, retail and other revenues also declined 67.9% and 63.6% to $38.7 million and $19.1 million, respectively.
    
Further, table games drop fell 28.4% year over year to $296.6 million. However, table games win witnessed growth of 0.5% year over year to $72.3 million. During the fourth quarter, table games win percentage of 24.4% was within the projected range of 22-26% and above 17.4% reported in the prior-year quarter.

During the reported quarter, RevPAR declined 63.5% year over year to $105. Occupancy rate was 34.2%, down from 89.4% from the prior-year quarter’s levels. ADR was $305, down 5.3% year over year.

Encore Boston Harbor

Encore Boston Harbor closed all operations on Mar 15 for remainder of the first quarter and second-quarter 2020. On Jul 10, Encore Boston Harbor reopened operations. Following the reopening, certain food and beverage outlets had remained temporarily closed with limited hotel operations. On Nov 6, a Massachusetts directive implemented an overnight curfew on certain businesses. Due to this, Encore Boston Harbor limited its daily operating hours and temporarily closed the hotel tower. Following the relaxation in restrictions on Jan 25, 2021, Encore Boston Harbor restored certain operations and reopened its hotel tower on a (Thursday through Sunday) weekly schedule. However, capacity restrictions are still in place.

Nonetheless, adjusted property EBITDA from Encore Boston Harbor for fourth-quarter 2020 came in at $16.7 million compared with $15.3 million in the prior-year quarter.

Operating Performance

During the fourth quarter, adjusted property earnings before interests, taxes, depreciation and amortization (EBITDA) came in at $69.8 million compared with $443.1 million in the prior-year quarter.

In the quarter under review, adjusted property EBITDA from Macau totaled $39.4 million compared with $347.7 million reported in the prior-year quarter. Adjusted property EBITDA from Las Vegas operations came in at $21 million compared with $80.1 million in the prior-year quarter.

Cash Position

As of Dec 31, 2020, Wynn Resorts’ cash and cash equivalents totaled $3.48 billion.

Outstanding debt at the end of the fourth quarter amounted to $13.07 billion, including $3.12 billion of Wynn Las Vegas related debt, $6.35 billion of Macau debt, $2.99 billion of Wynn Resorts Finance debt and $612.3 million of debt held by the retail joint venture, which the company consolidated.

2020 Highlights

Net revenues in 2020 came in at $2.1 billion compared with $6.61 billion in 2019.

Adjusted property EBITDA in 2020 came in at ($324.3) million against $1.82 billion in 2019.

In 2020, diluted loss per share came in at $19.18 per share against earnings of $2.61 in the previous year.

Other Updates

On the development front, Wynn Resorts made significant progress with respect to WynnBet online casino and sports betting app. During the fourth quarter, the company launched online sports and casino offerings in Colorado and Michigan. It also secured market access in Indiana, Iowa and Ohio. Meanwhile, the company submitted an application for licensing in Virginia. It also received conditional licensing in Tennessee.

Zacks Rank & Key Picks

Wynn Resorts currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the Zacks Consumer Discretionary sector include TEGNA Inc. (TGNA - Free Report) , Callaway Golf Company (ELY - Free Report) and PVH Corp. (PVH - Free Report) each sporting a Zacks Rank #1.

TEGNA has a trailing four-quarter earnings surprise of 19.8%, on average.

Callaway Golf’s 2021 earnings are expected to surge 37.5%.

PVH has three-five-year earnings per share growth rate of 18%.

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