LAS VEGAS, Nev. – Las Vegas was good to Wynn Resorts Ltd. in the third quarter but not enough to make up for a stormy three months in Macau.
Wynn reported Tuesday that the company’s revenue dropped 1.4 per cent to $1.37 billion in the quarter as gains in Vegas were offset by a decline in Macau, its biggest market.
The company’s net income rose about 5 per cent on lower expenses to $191.4 million or $1.88 per diluted share, and adjusted earnings per share of $1.95 met Street expectations, according to a survey by FactSet.
The casino-resort’s founder and CEO Steve Wynn told analysts that he didn’t know if they were in the metaphorical “squall or the rainy season” in Macau, or how long it would pose a challenge, but the company remained bullish on the region.
Still, Wynn noted that the situation has been worse in October than before.
A majority of Wynn Resorts revenue — $942 million in the third quarter — comes from Macau.
Operating revenue there dropped 5.6 per cent while Las Vegas operating revenue rose 9 per cent. VIP gamblers have been shying away from Macau casinos amid a government corruption crackdown. Add to that the political unrest in Hong Kong and a recent ban on smoking inside casinos and the region has become an increasingly challenging place to do business.
Wynn said the smoking ban might turn out to be fortuitous for its $4.1 billion Wynn Palace development in the Cotai region of Macau since the 1,700-room resort is being designed with outdoor terraces along the side facing a massive man-made lake. The terraces will be linked to high-roller areas of the hotel, he said.
What the company lost in big-spending VIPs in Macau, it gained in regular gamblers and what they spent playing slot machines.
Players put $1.4 billion in the company’s Macau slot machines during the quarter, 23 per cent more than they did a year ago. How much the casino kept increased by 32 per cent.
The company had little problem filling its 1,008 rooms in Wynn Macau and Encore, reporting a higher 98.5 per cent occupancy rate for the last three months. The average daily rate rose to $327.
In Las Vegas at his Wynn and Encore properties, Wynn told analysts he raised room rates by 18 per cent last month.
Hotel, casino, food and beverage and entertainment revenue were all up at the Wynn and Encore resorts.
In talking about his plans for Boston after winning a gambling license last month, Wynn again said he has plans for the property that will set it apart from anything else in the industry.
Days before voters in Massachusetts decide whether or not to do away with gambling in their state, Wynn said he didn’t think he has “ever been as excited” about a project as his under development Boston casino-hotel that hinges on the statewide vote Tuesday.
Wynn Resorts also raised its regular quarterly dividend by 20 per cent to $1.50 and declared a special dividend of $1, for a total dividend of $2.50.
In after-hours trading, Wynn shares fell 5 cents to $185.20