Wynn Resorts, Limited WYNN anticipates first-quarter 2020 results to decline sharply on account of the coronavirus pandemic. Despite this, the company’s shares surged 13.5% on Apr 8. Investor sentiment was primarily bolstered by the company’s announcement that it has liquidity worth nearly $3 billion. This, in turn, will aid the company tide over the coronavirus-induced crisis.
Q1 Results to Decline Sharply
The company announced that visitation on Macau has declined sharply ever since the outbreak of coronavirus in China. In Macau, casinos were shutdown beginning Feb 5 on account of the same .Casinos were reopened (on a reduced basis) on Feb 20. Although casinos were full opened on Mar 20, travel restrictions and limited number of tables at casinos continue to hurt the company. During the shutdown period, the company incurred operating expenses of nearly $2.5 million per day, excluding cash interest expense of roughly $0.5 million per day.
Wynn Resorts business in the United States will also be impacted by the COVID-19 outbreak. In an effort to contain the spread of this deadly virus, the company’s Encore Boston Harbor and Wynn Las Vegas closed its operation on Mar 15 and Mar 17, respectively. Wynn Las Vegas will remain shut through at least Apr 30, while Encore Boston Harbor will remain closed through at least May 4, 2020. The company has been bearing operating expenses of nearly $3.5 million during the closure, excluding nearly $0.8 million per day of cash interest expense.
The aforementioned factors are likely to hurt the company’s first-quarter 2020 results. The company now expects revenues in the range of approximately of $912 million to $969 million in the first-quarter, sharply down from $1.64 billion in the prior year. The company expects adjusted property EBITDA in the range of nearly $58 million to $65 million, down from $484 million reported in the year-ago quarter.
Earlier, the company said that the board of directors and top executives have agreed to forego between 33% and 100% of their salaries in the light of the coronavirus-induced economic downturn. Matt Maddox, CEO, has agreed to give up 100% of his salary in exchange for shares for the rest of 2020.
Owing to the ongoing coronavirus pandemic, the shares of this Zacks Rank #4 (Sell) have fallen 51.7%, compared with the industry’s decline of 44.5%. Other stocks like MGM Resorts International MGM, Melco Resorts & Entertainment Limited MLCO and Century Casinos, Inc. CNTY have tanked 54.8%, 44.2% and 63.2%, respectively, in the past month.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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