ts Wynn Las Vegas resort also held up, posting a slight 3.3% revenue increase despite a slowing US economy. CEO Wynn said the company did not see its business slow, but he forecast general weakness ahead, saying "you probably should turn on the yellow light" for the Las Vegas market. "It would be unsophisticated to think that Las Vegas is somehow a magical island unto itself," he told analysts on a conference call.
Wynn shares fell 4 cents to close at us$ 119.84 before the earnings announcement and dropped another us$ 5.09, or 4.2%, to us$ 114.75 in after-hours trading. Despite the drop, Wynn shares remained priced about 12% higher than they were a month ago when markets closed January 11.
The company’s fourth-quarter net profit of 57 cents a share reversed a loss in the same quarter of 2006 of 55 cents a share. Revenue rose 26% to us$ 711.3 million. On an adjusted basis, net profit came in at 72 cents a share, compared with 53 cents a share a year earlier.
That beat the expectations of analysts surveyed by Thomson Financial, who predicted adjusted net income of 68 cents per share on revenue of us$ 692 million. For all of 2007, Wynn’s revenue was up 88% from 2006 to us$ 2.69 billion, but net profit was down 59% to us$ 258.1 million.
Casino net revenues at the company’s Wynn Las Vegas resort fell to us$ 160 million in the fourth quarter, down 2.3%, or us$ 3.7 million, from a year earlier. While more money was wagered on tables games in the quarter, worse luck led to a us$ 17.5 million downward swing in what the casino kept. Non-casino revenue rose 8.1% to us$ 206.7 million, with higher food, beverage, retail, entertainment and hotel receipts.
Meanwhile, the total amount bet on VIP table games at Wynn Macau surged to us$ 11.2 billion in the quarter, compared with us$ 6.6 billion a year earlier, and the casino won 3% of the amount wagered, higher than the 2.6% hold in 2006’s fourth quarter. The amount bet on all other table games was us$ 507.6 million, a 1.2% drop from a year earlier.
Analyst Lawrence Klatzkin of Jefferies & Co. said the company’s generally wealthy customers showed resilience to worries about the economy. "It was pretty much business as usual," Klatzkin said. "In this economy, I guess that’s a good thing."
The company finished a major expansion of its Wynn Macau resort in late December, increasing the number of table games by 40% to 380 while nearly doubling the number of slot machines to 1,270.
It also is building a us$ 600 million Wynn Diamond Suites in Macau, a 405-room luxury offering to open in the first half of 2010, and is awaiting approval from the Macau government to develop another site on 21 hectares. In Las Vegas, the under-construction us$ 2.1 billion Encore property is set to open in early 2009.