International edition
September 16, 2021

Earnings for the quarter ended June 30 jumped to us$ 272 million

Wynn Resorts second quarter profit more than triples

(US).- Wynn Resorts reported that its second-quarter earnings more than tripled compared to last year due to a hefty tax benefit and strong revenue growth at Macau property.


arnings for the quarter ended June 30 jumped to us$ 272 million, or us$ 2.42 per share, from us$ 89.6 million, or 82 cents per share, in 2007. The results included a us$ 140.7 million deferred tax benefit. Excluding special items, profit rose 23.3 percent. It totaled us$ 124.3 million, or us$ 1.11 per share, compared with us$ 100.8 million, or 92 cents per share, in the second quarter last year.

The tax benefit related to foreign tax credits for Wynn Macau, which were included in the company's U.S. tax expense in prior years. Wynn said it recorded the benefit after a study of the taxes levied on those operations under Macau law. Revenue rose 20 percent to us$ 825.2 million, driven by a 50 percent revenue increase at Wynn Macau. At Wynn Las Vegas, net casino revenue fell 24 percent.

Analysts surveyed by Thomson Financial, who generally excludes special items, forecast earnings of 93 cents per share on revenue of us$ 828.1 million.

"The report again highlights the severity of the slowdown in Vegas and commentary from Mr. Wynn did nothing to alleviate concerns," said Thomas Weisel Partners analyst Jake Fuller, referring to billionaire Steve Wynn, the company's chairman and chief executive.

In a note to investors, Fuller noted that the company's earnings got another boost from lighter-than-expected interest expense. Earlier this month, Wynn had warned investors about the shortfall in operating income for its Las Vegas property so the results did not surprise investors.

Wynn said then that the property also booked a lower-than-normal hold percentage, which is the amount won the casino as a percentage of the total amount wagered. The Las Vegas property's revenue per available room, or revpar, fell 3 percent to us$ 292 during the period as occupancy slipped. Revpar is considered a key gauge of a hospitality company's performance.

The Las Vegas gaming market has been struggling with the impact of soaring gas prices and reduced airline capacity into the city. "We're not sure what it will mean, but it's part of the passing parade and the current short-term environment," Wynn said in a conference call with investors. "I don't think -- as an operator, there's not a hell of a lot you do about it. You're not going to change your way of doing business." "If there's less traffic, then you make less money. Period," Wynn added.

Revpar at Wynn's Macau property, meanwhile, surged 9.9 percent to us$ 244. Wynn also provided an update on its Encore resort, to open adjacent to Wynn Las Vegas in December. The budget for Encore and related improvements is about us$ 2.3 billion. As of June 30, Wynn had incurred about us$ 1.5 billion of the project costs.

The company began construction of another Encore at Wynn Macau in 2007 and expects that property to open in the first half of 2010. As of June 30, Wynn has incurred us$ 114.1 million of the expected us$ 700 million cost of Wynn Macau.

Wynn shares dipped us$ 2.09, or 2.3 percent, to us$ 89.50 in after-hours trading, after dropping us$ 8.22, or 8.2 percent, to us$ 91.59 during the regular session. The stock has traded between us$ 69.27 and us$ 176.14 during the past 52 weeks.

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