Friday, February 11, 2011

Wynn Resorts profit beats Street, shares dip

LOS ANGELES:'' Wynn Resorts Ltd posted a better-than-expected fourth-quarter net profit, compared with a loss a year earlier, as revenue at its Wynn Macau <1128.HK> unit climbed 79 percent, according to Reuters on Thursday, Feb 10.

But some of the Macau gain was attributed to luck and the company's shares fell about 1 percent after-hours.

"I think they put up a very big Macau number, but if you look at the hold percentage it was up quite a bit," said Hudson Securities analyst Robert LaFleur, referring to the amount of money the casinos won from gamblers.

Gambling revenue has soared over the past several months in Macau, the only place in China where gambling is legal, while the Las Vegas Strip has just begun to emerge from the cycle of lackluster demand driven by the recession and a glut of new hotel rooms and casinos.

Wynn operates two casino-resorts in Macau and two in Las Vegas.

Chief Executive Officer Steve Wynn said the government of Macau has given verbal approval to plans for a third Wynn casino in the Chinese gambling enclave.

"I am hoping that we can get started in March or April at the latest," he told analysts on a conference call, adding that the new resort could open in late 2014 or early 2015. "But I have to wait for the government to give us a green light."

He put the cost of the new Macau property at $2.5 billion.

Wynn Resorts reported a fourth-quarter net profit $114.2 million, or 91 cents per share, compared with a net loss of $5.2 million, or a loss of 4 cents per share, a year earlier.

Adjusting for one-time items, the company earned 91 cents a share, soundly beating the 66 cents a share forecast by analysts, according to Thomson Reuters I/B/E/S.

Quarterly net revenue rose 53 percent to $1.24 billion. Analysts had expected $1.13 billion.

Wynn's revenue in Las Vegas rose 8 percent, while adjusted property earnings rose 25 percent to $68.3 million, due mainly to higher gambling revenue.

Steve Wynn said trends in Las Vegas have continued to move upward in early 2011.

The company's property earnings in Macau more than doubled to $296.8 million.

Wynn said it kept 3.15 percent of the $27.7 billion gambled by its VIP customers in Macau, compared with a normal hold range of 2.7 to 3 percent.

Shares of Wynn, which have more than doubled over the past 12 months to close at $120.15 on Thursday, were trading at $118.55 after-hours. - Reuters

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