DOW JONES NEWSWIRES
Wynn Resorts Ltd. (WYNN) swung to a fourth-quarter net loss on
lower gambling revenue and volume in Las Vegas and a big tax
expense.
Shares fell 8.9% to $23.50 in after-hours trading as the casino
operator's results fell far short of Wall Street's expectations.
The stock price has fallen 80% in the past six months.
Wynn, which opened the $2.3 billion, 2,000-room Encore
hotel-casino in Las Vegas in December, has one of the best balance
sheets of the major casino operators, with relatively low debt,
because it has been cautious about developments. It is the largest
gambling company by market capitalization because its stock has
fallen less than that of its rivals.
However, Wynn is suffering from the downturn in Las Vegas, where
gambling revenue on the Strip fell 22% in the fourth quarter as
travelers make fewer and shorter trips. Earlier this month, Wynn
said it will reduce pay and cut workweeks at its Wynn Las Vegas
hotel to save money.
In Macau, where Wynn plans to open a 400-room expansion to its
600-room hotel-casino next year, growth has slowed because of
China's new limits on visitors.
The company, run by billionaire Steve Wynn, reported a net loss
of $159.6 million, or $1.49 a share, compared with net income of
$65.5 million, or 57 cents a share, a year earlier.
The latest results included a $98.8 million tax expense.
Excluding items, earnings fell to 7 cents a share from 72
cents.
Gross revenue dropped 12% to $673.7 million. Minus promotional
allowances, net revenue declined 14% to $614.3 million, mostly on a
decline in gambling volumes, significantly lower hold percentage
and overall reduction in nongambling revenue in Las Vegas.
Analysts' estimates were for per-share earnings of 44 cents on
revenue of $703.5 million, according to a poll by Thomson
Reuters.
Casino revenue fell 13%. Food and beverage revenue declined 9.1%
and revenue from entertainment, retail and other areas dropped
14%.
In Las Vegas, casino revenue fell 43% while hotel revenue
decreased 14%. Earnings fell 67% on lower casino revenue and weaker
performance from the hotel, food and beverage, retail and
entertainment segments. The 15% table games hold was the lowest at
the Las Vegas properties since Wynn Las Vegas' opening in April
2005.
Macau revenue rose 1.2% as earnings slid 4.6%. Occupancy fell to
86.8% from 92.4%, generating revenue per available room of $237,
flat from a year earlier.
Amid the industry downturn, Wynn's rivals, such as MGM Mirage
(MGM) and Las Vegas Sands Corp. (LVS), have halted work on
development projects and MGM Mirage agreed to sell the Treasure
Island casino-hotel in Las Vegas for $775 million. Other casino
operators, such as Trump Entertainment Resorts Inc. (TRMP), have
filed for bankruptcy protection.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975;
Kathy.Shwiff@dowjones.com