Wynn Resorts Ltd. (WYNN:US), the casino company run by billionaire Steve Wynn, reported second-quarter results that missed analysts’ estimates because of lower winnings in Macau and Nevada.
Excluding items, profit totaled $1.38 a share, Las Vegas- based Wynn said today in a statement (WYNN:US). That missed the $1.50 a share average of 23 analysts’ estimates compiled by Bloomberg. Revenue fell 8.3 percent to $1.25 billion, shy of estimates (WYNN:US) of $1.33 billion.
Wynn shares were little changed in extended trading. Investors had been expecting worse results in Macau, according to Harry Curtis, an analyst at Nomura Securities International Inc. Growth in the Chinese gambling market has slowed and discounts offered by casino operators have increased, Wynn said today on a conference call.
“Competition has made everyone sharpen their knives,” said Wynn, the company’s chairman and chief executive officer.
Wynn rose 0.6 percent to $97.90 in extended trading. The stock gained 1 percent to $97.36 at the close in New York and has fallen 12 percent this year.
Net income rose 13 percent to $138.1 million, or $1.37 a share, from $122 million, or 97 cents, a year earlier, the company said. The 2011 result included a $107.5 million charge for the company’s donation to the University of Macau Development Foundation. That donation is part of a legal dispute between Wynn and former Vice Chairman Kazuo Okada, who was the largest shareholder until the company seized his stock.
Wynn’s results in Macau and Nevada were affected by a lower “hold,” the percentage of bets that casinos keep.
The company’s Macau revenue fell 7.1 percent to $907.6 million. Profit in Macau, or property earnings before interest, taxes, depreciation and amortization, declined 3.9 percent to $302.2 million.
Las Vegas revenue tumbled 12 percent to $345.6 million, while earnings there declined 38 percent to $81.9 million.
Industry results reported for Las Vegas and Macau had suggested Wynn would miss Wall Street estimates, Rachael Rothman, a casino analyst with Susquehanna International Group in New York, said in a research note today. She recommends buying Wynn shares.
Total gambling revenue on the Las Vegas Strip, where Wynn operates its namesake and Encore resorts, tumbled 18 percent in May to $475.1 million as casinos kept the lowest percentage of blackjack bets there ever, according to the state’s Gaming Control Board.
Casino revenue in Macau, where Wynn operates one resort and plans another, rose 12 percent in June, according to the city’s Gaming Inspection and Coordination Bureau. That was below the 15 percent median estimate of four analysts surveyed by Bloomberg.
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