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Wynn Resorts (WYNN) Stock Down Despite Q2 Earnings Beat
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Wynn Resorts Ltd. (WYNN - Free Report) posted solid results for second-quarter 2016, with earnings and revenues beating the Zacks Consensus Estimate.
However, the company’s shares declined over 6% in afterhours trading on Jul 28, mirroring investor concerns surrounding the weak revenues in Las Vegas.
Earnings and Revenue Discussion
Adjusted earnings of $1.07 per share in the quarter soared 44.6% year over year on higher revenues. Further, the figure beat the Zacks Consensus Estimate of 97 cents by 10.3%.
Adjusted earnings exclude pre-opening cost, a change in interest rate swap fair value, lower redemption note fair value, property charges as well as income tax and non-controlling interest impact.
Wynn Resorts’ revenues of $1.06 billion surpassed the Zacks Consensus Estimate of $1.02 billion by 4.1%. Revenues also inched up 1.7% buoyed by improved performance in Macau, partly offset by lower revenues in Las Vegas.
Adjusted property earnings, before interests, taxes, depreciation and amortization (EBITDA), rose 5.8% year over year to $312.7 million on the back of higher revenues. Meanwhile, total operating costs and expenses inched up 4.5% to $910.8 million owing to higher casino, pre-opening costs, property charges and general and administrative expenses.
The company owns and operates casino hotel resorts in Las Vegas and the Macau Special Administrative Region of the People's Republic of China.
Macau Operations
Wynn Resorts reports its Macau table games results under two segments – VIP and mass market.
Wynn Macau revenues increased 3.6% year over year to $639.3 million in the quarter, owing to higher casino revenues. Notably, casino revenues from Macau operations rose 5.2% to $609.8 million.
Notably, the Macau region has been struggling over the past few quarters due to the Chinese government’s anti-graft corruption drive, which has lowered footfall at the casinos. However, the company’s consistent efforts to boost tourism and traffic in Macau yielded results and the company also managed to turn around its Macau operations this quarter.
Meanwhile, table games turnover in the VIP segment plunged 23.8% to $11.9 billion due to a sluggish Macau VIP market. VIP table games win rate (based on turnover) was 3.98%, up 106 basis points (bps) and above the projected range of 2.7% to 3%.
Table drop in the mass market segment was $1.17 billion, down 1.7%. Table games win in the mass market category amounted to $235.2 million, up 12.7%. Moreover, mass market win rate was 20%, up 250 bps.
Revenue per available room (RevPAR) fell 5.2% in the quarter to $294 million mainly due to a 490-bps decline in occupancy rate. Average daily rate (ADR), however, remained flat. Non-casino revenues before promotional allowances tanked 12.7% to $68.1 million. In the quarter, adjusted property EBITDA was $190.4 million, up 9.8% due to strength in the gaming segment.
Wynn Resorts is focused on developing the Wynn Palace Project on the Cotai land in Macau. The resort is scheduled to open on Aug 22, 2016. Currently, the company expects the project to cost around $4.2 billion, of which around $151.2 million was spent in the second quarter.
Las Vegas Operations
Wynn Resorts’ revenues from Las Vegas operations were down 1.1% to $419 million due to lower casino and non-casino revenues. Notably, casino revenues from Las Vegas operations fell 1.3% to $132.9 million. Meanwhile, table games win percentage was 22.5%, up 300 bps, and within management’s guidance range of 21–25%.
Total non-casino revenues, before promotional allowances, decreased 0.9% year over year to $327.4 million. Room revenues were up 4.4% to $113.6 million backed by an increase in ADR. During the quarter, RevPAR grew 3.1% to $263 million, while ADR went up 6.6%. However, occupancy rate fell 310 bps to 81.7%. In the quarter, adjusted property EBITDA was up 0.2% to $122 million.
Wynn Resorts presently has a Zacks Rank #3 (Hold). Better-ranked stocks in the gaming industry include Isle of Capri Casinos, Inc. , Monarch Casino & Resort Inc. (MCRI - Free Report) and Melco Crown Entertainment Limited . While Isle of Capri Casinos and Monarch Casino & Resort sport a Zacks Rank #1 (Strong Buy), Melco Crown Entertainment carries a Zacks Rank #2 (Buy).
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Wynn Resorts (WYNN) Stock Down Despite Q2 Earnings Beat
Wynn Resorts Ltd. (WYNN - Free Report) posted solid results for second-quarter 2016, with earnings and revenues beating the Zacks Consensus Estimate.
However, the company’s shares declined over 6% in afterhours trading on Jul 28, mirroring investor concerns surrounding the weak revenues in Las Vegas.
Earnings and Revenue Discussion
Adjusted earnings of $1.07 per share in the quarter soared 44.6% year over year on higher revenues. Further, the figure beat the Zacks Consensus Estimate of 97 cents by 10.3%.
Adjusted earnings exclude pre-opening cost, a change in interest rate swap fair value, lower redemption note fair value, property charges as well as income tax and non-controlling interest impact.
Wynn Resorts’ revenues of $1.06 billion surpassed the Zacks Consensus Estimate of $1.02 billion by 4.1%. Revenues also inched up 1.7% buoyed by improved performance in Macau, partly offset by lower revenues in Las Vegas.
Adjusted property earnings, before interests, taxes, depreciation and amortization (EBITDA), rose 5.8% year over year to $312.7 million on the back of higher revenues. Meanwhile, total operating costs and expenses inched up 4.5% to $910.8 million owing to higher casino, pre-opening costs, property charges and general and administrative expenses.
The company owns and operates casino hotel resorts in Las Vegas and the Macau Special Administrative Region of the People's Republic of China.
Macau Operations
Wynn Resorts reports its Macau table games results under two segments – VIP and mass market.
Wynn Macau revenues increased 3.6% year over year to $639.3 million in the quarter, owing to higher casino revenues. Notably, casino revenues from Macau operations rose 5.2% to $609.8 million.
Notably, the Macau region has been struggling over the past few quarters due to the Chinese government’s anti-graft corruption drive, which has lowered footfall at the casinos. However, the company’s consistent efforts to boost tourism and traffic in Macau yielded results and the company also managed to turn around its Macau operations this quarter.
Meanwhile, table games turnover in the VIP segment plunged 23.8% to $11.9 billion due to a sluggish Macau VIP market. VIP table games win rate (based on turnover) was 3.98%, up 106 basis points (bps) and above the projected range of 2.7% to 3%.
Table drop in the mass market segment was $1.17 billion, down 1.7%. Table games win in the mass market category amounted to $235.2 million, up 12.7%. Moreover, mass market win rate was 20%, up 250 bps.
Revenue per available room (RevPAR) fell 5.2% in the quarter to $294 million mainly due to a 490-bps decline in occupancy rate. Average daily rate (ADR), however, remained flat. Non-casino revenues before promotional allowances tanked 12.7% to $68.1 million. In the quarter, adjusted property EBITDA was $190.4 million, up 9.8% due to strength in the gaming segment.
Wynn Resorts is focused on developing the Wynn Palace Project on the Cotai land in Macau. The resort is scheduled to open on Aug 22, 2016. Currently, the company expects the project to cost around $4.2 billion, of which around $151.2 million was spent in the second quarter.
Las Vegas Operations
Wynn Resorts’ revenues from Las Vegas operations were down 1.1% to $419 million due to lower casino and non-casino revenues. Notably, casino revenues from Las Vegas operations fell 1.3% to $132.9 million. Meanwhile, table games win percentage was 22.5%, up 300 bps, and within management’s guidance range of 21–25%.
Total non-casino revenues, before promotional allowances, decreased 0.9% year over year to $327.4 million. Room revenues were up 4.4% to $113.6 million backed by an increase in ADR. During the quarter, RevPAR grew 3.1% to $263 million, while ADR went up 6.6%. However, occupancy rate fell 310 bps to 81.7%. In the quarter, adjusted property EBITDA was up 0.2% to $122 million.
WYNN RESRTS LTD Price, Consensus and EPS Surprise
WYNN RESRTS LTD Price, Consensus and EPS Surprise | WYNN RESRTS LTD Quote
Zacks Rank & Stocks to Consider
Wynn Resorts presently has a Zacks Rank #3 (Hold). Better-ranked stocks in the gaming industry include Isle of Capri Casinos, Inc. , Monarch Casino & Resort Inc. (MCRI - Free Report) and Melco Crown Entertainment Limited . While Isle of Capri Casinos and Monarch Casino & Resort sport a Zacks Rank #1 (Strong Buy), Melco Crown Entertainment carries a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>