After a year that was largely attributed to transition of its business in Macau, Wynn Resorts Ltd. announced that it it’s second quarter financial results in Macau fell short of analysts’ expectations. For the time period, Wynn said that it earned $1.51 per share based on revenue in the second quarter of the year reaching $1.33 billion. Of this total earnings, Wynn Macau accounted for $930.9 million, representing a decline of four percent in adjusted property EBITDA to $290.1 million.
The company is far from bleeding money, but with analysts’ forecasts pegged at earnings of $1.57 per share on revenue of $1.34 billion, the Las Vegas-based company’s Macau business in that time frame could be construed as disappointing. Wynn Macau’s struggles keeping up with its competitors in Macau actually was building up in the past few months before hitting a low in June when MGM China Holdings, perennially the cellar-dweller in monthly gross gaming revenue among the six Macau operators, jumped up a spot in the standings with an 11-percent market share for the month, leapfrogging Wynn Macau, whose percentage dropped to 10 percent compared to its 12 percent piece only a month earlier.
Despite the less-than-stellar showing of Wynn Resort’s Macau business, the company still expressed enthusiasm over its second quarter earnings, particularly the performance of its business in Las Vegas, which saw its adjusted property EBITDA rise 10.8 percent to $425.7 million in the second quarter with income also rising by 10 percent to $152.9 million, translating into an EPS of $1.51.
The overall net revenue of $1.33 billion was still in line with expectations, albeit falling a hair short of initial estimates. Then again, the surprising surge in its Las Vegas business allowed Wynn to expand its EBITDA margins from 30.6 percent last year to 32 percent this year with casino revenues currently contributing to 76.4 percent of total sales.
It seems that Wynn is settling into a good groove run for the year, notwithstanding the off performance of its Macau joint. The struggles in the gambling enclave, though, appears to have a number of explanations, not the least of which is the current expansion plans that would give rise to the company’s second resort and casino in Macau, specifically in the town’s Cotai district, as well as current renovations being done to 600 rooms at Wynn Macau Resort, cutting around a sixth of the hotel’s inventory out of the equation.