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Wynn Resorts (WYNN) to Report Q3 Earnings: What's in Store?

Zacks Equity Research

Wynn Resorts, Limited WYNN is scheduled to report third-quarter 2019 results on Nov 6, after the closing bell.

In the last reported quarter, the company delivered a positive earnings surprise of 1.4%. However, its bottom line missed the Zacks Consensus Estimate in two of the trailing four quarters, with the average negative surprise being 6.1%.

Which Way are Estimates Headed?

For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has declined 12.5% to 92 cents over the past 30 days. The estimated figure indicates a decrease of 45.2% from $1.68 per share reported in the year-ago quarter.

The Zacks Consensus Estimate for quarterly revenues is pegged at $1,669 million, implying approximately 2.3% decline from the prior-year reported number.

Wynn Resorts, Limited Price and EPS Surprise

 

Wynn Resorts, Limited Price and EPS Surprise

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

 

Factors at Play

Wynn Resorts’ top line in the third quarter is likely to have been affected by a significant decline in Wynn Palace revenues on a year-over-year basis. Again, lower VIP turnover in Macau owing to trade dispute and political tension, along with unusually low table hold in Vegas are likely to have negatively impacted the company’s top line.

The consensus estimate for third-quarter revenues for Macau Operations — accounting for 72% of the company’s total revenues — is pegged at $279 million, indicating 2.2% growth from $273 million in the year-ago period but a 48.9% decline from $546.5 million reported in the second quarter.

The Zacks Consensus Estimate for third-quarter revenues from Las Vegas operations (accounting for 28% of the company’s total revenues) is pegged at $267 million, suggesting a 3.1% year-over-year increase but 42.5% sequential decline.

The consensus mark for revenues from Wynn Palace is pegged at $636 million, implying a decline of 13% from $731 million reported in the year-ago period but 1.1%, growth from$628.9 million in the second quarter.

In addition to the gaming business in Macau, the company has been increasingly focusing on driving non-gaming revenues. This is likely to have continued in the third quarter. Given the decent visitation pattern in Macau, infrastructure development and government’s efforts to boost tourism in Macau, non-gaming sources are expected to have increased Wynn Resorts’ third-quarter revenues.

In order to boost performance in Las Vegas, the company has remodeled rooms at its properties and the baccarat pit. The number of visits has been increasing every year. With improving job scenario and stabilizing gas prices, the consumer spending environment in domestic markets is also improving. Hence, higher visitation pattern in Las Vegas is likely to have offset the above-mentioned headwinds in the third quarter.

What the Zacks Model Says

Our proven model does not conclusively predict an earnings beat for Wynn Resorts this time around. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to deliver a positive surprise. This is not the case here, as you will see below.

Earnings ESP: Wynn Resorts has an Earnings ESP of -8.36%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: It currently carries a Zacks Rank #5 (Strong Sell).

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

Stocks Poised to Beat Earnings Estimates

Here are some stocks from the Consumer Discretionary sector that investors may consider, as our model shows that these have the right combination of elements to come up with an earnings beat in the to-be-reported quarter:

Lululemon Athletica Inc. LULU has a Zacks Rank #2 and an Earnings ESP of +1.54%.

Under Armour, Inc. UAA has a Zacks Rank #3 and an Earnings ESP of +9.37%.

Ralph Lauren Corporation RL has a Zacks Rank #3 and an Earnings ESP of +0.21%.

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Wynn Resorts, Limited (WYNN) : Free Stock Analysis Report
 
lululemon athletica inc. (LULU) : Free Stock Analysis Report
 
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Under Armour, Inc. (UAA) : Free Stock Analysis Report
 
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