Majestic Research

Reuters

Wynn Resorts Second-Quarter Net Loss Narrows

By Deena Beasley
Published: August 01, 2006

LOS ANGELES, Aug 1 (Reuters) - Casino operator Wynn Resorts Ltd. said on Tuesday its second-quarter loss narrowed as business at Wynn Las Vegas continued to build and it prepares to open its first casino in the Chinese gambling enclave of Macau.

The Las Vegas-based company’s shares rose 3 percent in after hours trading after Chief Executive Steve Wynn said on a conference call that July’s casino and non-casino revenue at Wynn Las Vegas was “sharply ahead of last year.”

The company reported a second quarter net loss of $20.1 million, or 20 cents a share, compared with a net loss of $41.8 million, or 43 cents a share, a year earlier.

Excluding one-time items, the company earned a profit of 5 cents a share, matching the average analyst estimate, as compiled by Reuters Estimates.

“They don’t seem to be going along with the general trend of a slower mass market in Las Vegas,” said Matthew Jacob, an analyst at Majestic Research.

He attributed Wynn’s robust growth to a focus on high-end consumers and the fact the Las Vegas resort is still relatively new.

Revenue totaled $273.4 million, including $113.5 million in net casino revenue.  Analysts had expected total revenue of $273.1 million.

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.

Wynn said gamblers had a run of luck in June at the resort’s slot machines and table games, which resulted in a decline in win per unit per day for the second quarter.

But second-quarter revenue from non-gambling sources such as hotel rooms, retail and food rose 2.4 percent to $196.3 million.

The resort’s average daily room rate during the quarter was $293, with occupancy averaging 95.7 percent.

The CEO said there is still room to trim costs at Wynn Las Vegas.

The company is also building a $1.2 billion casino resort in the Chinese enclave of Macau, with the first phase scheduled to open Sept. 5.

In addition, the company is erecting adjacent to Wynn Las Vegas a 2,000-room casino-resort, called Encore, that is scheduled for completion in December 2008.

Wynn’s shares fell $2.31, or 3.6 percent, to close at $61.70 on Nasdaq, but were quoted at $63.60 in after hours trading.  The stock is up about 11.5 percent so far this year, compared with a gain of 7.2 percent for the Dow Jones U.S. Gambling Index.