Wynn Resorts to post 3Q earnings on Tuesday

By OSKAR GARCIA

posted: 30 DAYS 9 HOURS AGO

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LAS VEGAS -Wynn Resorts Ltd. is to report its third-quarter financial results before the market opens Tuesday. Below is a summary of key developments and analyst opinion related to the period.

OVERVIEW: Wynn Resorts, run by billionaire and major stockholder Steve Wynn, operates casino resorts in Las Vegas and the Chinese island gambling enclave of Macau. It has a resort under construction in Macau.

The $700 million Encore at Wynn Macau, due to open next year, is expected to include 600 rooms and suites along with casino, restaurant, retail and lounge space.

The Las Vegas-based company at the end of the third quarter priced an initial public offering of 1.25 billion shares on the Hong Kong market at $1.30 per share (10.08 Hong Kong dollars). The shares — which represent a 25 percent stake in the company's Macau operations — raised $1.63 billion and jumped 7 percent the first day they were traded, Oct. 9.

Wynn Resorts also said in September that it agreed with its lenders to issue up to $500 million in new notes between then and March 10 next year to help it pay down its debt. Under the agreement, three-quarters of the proceeds must be used to prepay loans or reduce the company's existing debt. Wynn Resorts reported having $4.12 billion in long-term debt at the end of the second quarter.

CEO Wynn made huge splashes in entertainment from Las Vegas to Nashville, Tenn., this month when he announced that country star Garth Brooks was coming out of retirement to perform routine solo shows at the Wynn Las Vegas, possibly for the next five years.

Tickets for the first 20 shows sold out in less than five hours at $125 each.

Casinos use entertainment to attract customers in hopes that they will gamble, eat and stay in a resort's hotel rooms. The terms of Wynn's deal with Brooks were not disclosed, but both said it was sealed when Wynn promised Brooks a private jet to travel to and from the gig.

BY THE NUMBERS: Analysts polled by Thomson Reuters on average expect Wynn Resorts to earn 15 cents per share on $743 million in revenue, compared with a profit of 62 cents per share on revenue of $769 million in the same period a year earlier.

ANALYST TAKE: Two ratings agencies upgraded their outlooks on Wynn Resorts this month after the company's IPO in Hong Kong.

Moody's Investors Services said the company's prospects are improving and raised its outlook from negative to stable, which means its credit ratings are not likely to change soon.

Fitch Ratings boosted its outlook on Wynn to positive from stable, saying Wynn's improved operating outlook in Macau played a role in the revision.

Gabriel Chan, an analyst at Credit Suisse in Hong Kong, said Wynn Resorts is Macau's No. 4 operator, with about 14 percent of the local gambling market.

"People are quite bullish about Macau right now," Chan said when Wynn's IPO launched. "And people are still giving Wynn the benefit of the doubt that he can win market share."

WHAT'S AHEAD: Besides a financial update, analysts will likely want to know about Wynn's progress on Macau and the chief executive's take on the Chinese and American gambling markets.

Never shy with his opinions, Steve Wynn has made several recent press appearances knocking President Barack Obama and his administration. Wynn believes the White House should focus more on job creation. Casino executives from other companies, including MGM Mirage, Harrah's Entertainment Inc. and Station Casinos Inc., have publicly said they disagree.

Analysts will also want to know how Las Vegas will be affected by CityCenter, the behemoth MGM Mirage complex opening on the Las Vegas Strip in December. The $8.5 billion project is adding thousands of hotel rooms on the Strip at a time when operators are already slashing room rates in a struggle to keep occupancy above 90 percent.

Wynn has said in the past that he's happy when neighbors open new resorts, because his goal is to pick off the top spenders who come to Las Vegas for any reason.

STOCK PERFORMANCE: Wynn Resorts shares have rebounded from their 52-week low of $15.40, reached March 6, and remain close to their 52-week high of $74.90. They closed the third quarter at $70.89, and they closed Monday at $63.07, up 61 cents, about 1 percent.

2009-10-26 17:36:10