Wynn Resorts 2Q net income rises, but revenue down

[July 18, 2012]  NEW YORK (AP) -- Wynn Resorts Ltd. said Tuesday its second-quarter earnings rose from the same quarter last year, which was weighed down by a hefty charge. But revenue fell at its operations in both Las Vegas and the Asian gambling center of Macau.

It's the first time revenue has declined in Macau in three years and highlights the impact of slowing growth in Asia for the company run by billionaire casino impresario Steve Wynn. The effects of the still-shaky economy had already been seen in Las Vegas, where sales had also slipped in the first three months of the year.

The Las Vegas-based company earned $138.1 million or $1.37 per share in the second quarter, compared with $122 million, or 97 cents per share, in the same period a year earlier. The second quarter of 2011 was hurt by a $107.5 million charge on the declining value of a charitable contribution.

Revenue fell to $1.25 billion from $1.37 billion a year ago.

The results fell well below Wall Street's forecast. Analysts polled by FactSet expected $1.51 per share on revenue of $1.34 billion.

Hotel room rates improved in both of Wynn's markets in the second quarter -- up 1 percent in Macau and 6 percent in Las Vegas.

Overall revenue, which includes hotels, gambling, food and other entertainment, fell 7 percent in Macau and nearly 12 percent in Las Vegas. Growth in Macau is critical for Wynn because it accounts for more than two-thirds of the company's revenue, and Wynn recently doubled down there.

It announced plans to spend $4 billion to build a long-awaited second Macau resort, shrugging off concerns that a shaky global economy and slowdown in China will dent profit in the world's most lucrative gambling market. The project includes 2,000 hotel rooms, 500 gambling tables, 10 restaurants, shops, spa, meeting rooms and a nightclub.

In a conference call with analysts, CEO Steve Wynn said the company will keep its expansion plans despite a slowdown in Asian business and increasing competition from companies including Las Vegas Sands and MGM.

"Competition has made everybody sharpen their knives," he said. "It's healthy in the long run; challenging in the short run. But we understand this. We wait until we see something real and then we deal with it. Which maybe makes us a little slower sometimes, but we're not sleepy. We're just careful."

Wynn added that although growth in Asia has cooled, it's still more stable than anyplace else.

"Europe and the United States are tricky," he said.

The stock, which has been hit hard in recent months over worries about Asian growth, rose about 63 cents in aftermarket trading to $97.99. It closed up 92 cents at $97.36 in the regular session.

[Associated Press; By SAMANTHA BOMKAMP]

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