Majestic Research

Reuters

Wynn Resorts First-Quarter Loss Narrows

By Deena Beasley
Published: May 03, 2006

LOS ANGELES, May 3 (Reuters) - Casino operator Wynn Resorts Ltd. said on Wednesday its first-quarter loss narrowed as business at Wynn Las Vegas continued to build after its debut just over a year ago.

The company reported a net loss of $11.4 million, or 12 cents a share, compared with a net loss of $30 million, or 30 cents a share, a year earlier.

“It’s encouraging that they are continuing to generate strong relative results in both slots and table games,” said Matthew Jacob, an analyst at Majestic Research.

He also said Wynn’s profit margin of 29.2 percent for the quarter is high in an industry where a new property typically takes more than a year to get up to speed.

Excluding one-time items, Wynn had a profit of 1 cent a share, which fell short of the average analyst estimate of 11 cents a share, as compiled by Reuters Estimates.

Jacob attributed the miss to higher interest and depreciation costs.

Wynn’s earnings before interest, taxes, depreciation and amortization totaled $81.1 million, beating the average analyst estimate of $72.4 million.

The company’s shares, which fell $1.48, or 2 percent, to close at $73.05 on Nasdaq, were slightly higher at $73.24 in aftermarket trading on the Inet electronic brokerage system.  The stock is up about 34 percent so far this year, compared with a gain of 24 percent for the Dow Jones U.S. Gambling Index.

Wynn Resorts, founded by former Mirage Resorts Chairman Steve Wynn, last April opened its first resort, the $2.7 billion Wynn Las Vegas, located toward the north end of the Las Vegas Strip.

The company said first quarter net revenue totaled $277.2 million, including $126.5 million in net gaming revenue.  Analysts had expected revenue of $273.5 million.

Net revenue from non-gambling sources such as hotel rooms, retail and food—including $68.2 million in room revenue—totaled $150.7 million.

The resort’s average daily room rate during the quarter was $293, with occupancy averaging 95.5 percent.

Wynn Resorts is also building a casino in the Chinese enclave of Macau, with the first phase scheduled to open in the third quarter of this year.

In addition, the company last week broke ground on a 2,000-room casino-resort, called Encore, that will be erected adjacent to Wynn Las Vegas. Encore is scheduled for completion in December 2008.