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Wynn Resorts' (WYNN) Q3 Earnings & Revenues Miss Estimates

Zacks Equity Research

Wynn Resorts, Limited WYNN reported third-quarter 2019 financial numbers, with earnings and revenues missing the Zacks Consensus Estimate. The top and the bottom line beat their respective consensus mark in the preceding two quarters.

Adjusted earnings came in at 17 cents per share, which lagged the consensus mark of 88 cents. In the year-ago quarter, the company had reported earnings per share of $1.68. This downside was caused by decline in operating income from the Macau and Las Vegas operations.

Revenues totaled $1,647.8 million, which missed the Zacks Consensus estimate of $1,669 million. The top line also declined 3.6% due to dismal performance by Wynn Palace and Wynn Macau.

Concurrent with the earnings announcement, the company declared a quarterly cash dividend of $1.00 per share. The dividend will be payable on Nov 22, 2019, to its shareholders of record as of Nov 14.

Wynn Palace Operations

Revenues from Wynn Palace totaled $598.2 million in the second quarter, down 18.1% year over year. Casino revenues summed $497.7 million, down 20.4%. At the VIP segment, table games turnover was $10.52 billion, down 32.3% year over year. VIP table games win rate (based on turnover) was 3.19%, above the expected range of 2.7-3%, but down from 3.4% witnessed in the year-ago quarter. Table drop at the mass market segment was $1.3 billion, up 9.2% from the year-ago quarter’s figure. Furthermore, table games win in mass market operations amounted to $324.2 million, up 5.2% year over year.

Non-casino revenues summed $100.5 million, down 4.3% from the year-ago quarter’s figure. Also, room revenues totaled $44.9 million, up 1.3% year on year. Notably, average daily rate (ADR) came in at $273, flat year over year. Occupancy was 97.2%, up 120 basis points year over year. Revenue per available room (RevPAR) was $265, flat year over year.

Wynn Macau Operations

Wynn Macau revenues fell 18.2% year over year to $474.3 million in the third quarter due to decline in casino revenues.

Notably, casino revenues in the reported quarter declined 18.8% to $408.8 million. Moreover, table games turnover at the VIP segment declined 42.5% to $8.02 billion. In the meantime, the VIP table games win rate (based on turnover) was 2.76%, within the expected range of 2.7-3.0% but lower than the year-ago quarter’s figure of 3.01%.

Table drop at the mass market segment was $1.32 billion, up 11.5% year over year. Table games win in the mass market category amounted to $272.5 million, up 8.9%.

Non-casino revenues came in at $65.5 million, down 13.9% year over year. Room revenues declined 4.8% year over year at $26.7 million. RevPAR came in at $281, up 2.9% from the year-ago quarter’s figure. Also, ADR was $283, up 2.5% year over year.

Wynn Resorts, Limited Price, Consensus and EPS Surprise

 

Wynn Resorts, Limited Price, Consensus and EPS Surprise

Wynn Resorts, Limited price-consensus-eps-surprise-chart | Wynn Resorts, Limited Quote

 

Las Vegas Operations

Revenues from Las Vegas operations were $399.5 million, flat year over year.

Casino revenues jumped 6.3% to $87 million. Also, table games drop increased 6.6% to $430.8 million. Meanwhile, table games win dropped 1.1% year over year to $85.7 million. Table games win percentage of 19.9% fell from 21.5% in the year-ago quarter and was also below the projected range of 22-26%.

Total non-casino revenues grew 2.1% year over year to $312.5 million. Room revenues increased 4.9% to $116.1 million. During the quarter, RevPAR surged 3.9% to $268. Occupancy rate was 87.9% compared with 89.6% in the year-ago quarter.

Food and beverage revenues came in at $149.7million, flat year over year. Entertainment, retail and other revenues were $46.7 million, flat year over year.

Operating Performance

Adjusted property earnings before interests, taxes, depreciation and amortization (EBITDA) declined 21.3% year over year to $396.9 million on dismal performance by Wynn Palace and Wynn Macau.

In the quarter under review, adjusted property EBITDA from Wynn Macau summed $139 million, down 24% year over year. Moreover, the same from Wynn Palace declined 35% to $162.2 million. Adjusted property EBITDA from Las Vegas operations fell 7.6% year over year to $88 million.

Cash Position

As of Sep 30, 2019, Wynn Resorts’ cash, cash equivalents and restricted cash totaled $1.68 billion.

Outstanding debt at the end of the third quarter amounted to $9.54 billion, including $4.06 billion of Macau related debt, $3.11 billion of Wynn Las Vegas debt, $1.76 billion of Wynn Resorts Finance debt, and $611 million of debt held by the retail joint venture.

Wynn Resorts, which share space with Caesars Entertainment Corporation CZR, has a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peer Releases

MGM Resorts International MGM reported third-quarter 2019 results, wherein earnings topped the Zacks Consensus Estimate but revenues lagged the same. Adjusted earnings of 31 cents per share beat the consensus mark of 29 cents by 6.9% and improved 34.8% from the prior-year quarter’s figure. Total revenues were $3,314.4 million, missing the Zacks Consensus Estimate of $3,370 million by 1.7%.

Las Vegas Sands Corp LVS reported third-quarter 2019 results, with earnings and revenues missing the respective Zacks Consensus Estimate for the second straight quarter.  Adjusted earnings came in at 75 cents per share, which missed the Zacks Consensus Estimate by a penny and declined 2.6% year over year. Net revenues totaled $3,250 million, which lagged the consensus mark of $3,314 million and declined 2.6% on a year-over-year basis.

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