Night party at XS in Wynn's Encore in Vegas - Photo credit: KayOne73
Wynn Resorts posted fourth quarter earnings after the bell on Thursday, taking a hit on China’s well-documented economic slowdown. Casino revenues fell in Macau, while Las Vegas was the surprising star, seeing sales jump 12.1% as the U.S. economy managed to muddle through a tough fourth quarter.
The casino operator founded and run by billionaire Steve Wynn saw adjusted net income take a dramatic 39.2% tumble to $118.2 million. Wynn missed EPS estimates, earning $1.17 per share, compared with the consensus call of $1.26.
The casino operator suffered due to its exposure to China. Macau, which has become the major portion of international casino companies’ sales, helped push net revenues down 7.8% to $1.29 billion; Wall Street expected $1.28 billion.
Specifically, Wynn saw its Macau revenue drop 9.7% to $898.7 million, as both VIP and mass market table game sales, along with slot machine revenue, fell. The Chinese territory made up nearly 70% of the company’s revenue in the fourth quarter, and delivered adjusted property EBITDA of $283.2 million.
With Macau suffering China’s economic slowdown, it was Las Vegas that provided for Wynn in the fourth quarter. Wynn’s revenues in the City of Sin jumped 12.1% to $390.4 million. Net casino revenues surged 23.8% to $180.5 million, the company revealed, while adjusted property EBITDA grew an impressive 29.4% to $11.53 million.
Casino operators have increasingly seen their revenues coming from Asia, at the expense of Las Vegas, which was overtaken by Macau in 2006 as the global gambling hub. Las Vegas Sands, for example, had a good fourth quarter in Macau, but had a weak performance in Las Vegas, as my collegue Steve Schaefer reported.. MGM International and Melco Crown are set to post earnings next month, while Caesars, which doesn’t have operations in Asia, will join them on February 28.
Shares in Wynn initially rallied on the financial results, but quickly gave up those gains and by 4:42 PM in New York were trading down 0.6% to $124.51.
