Macau's Growth Fuels Wynn Resorts

Wynn Resorts took market share in Macau last quarter, a shocking development considering it doesn't have prime real estate on the Cotai Strip.

Jan 31, 2014 at 11:15AM

Wynn Resorts (NASDAQ:WYNN) wowed investors with its earnings report last night, growing faster than Macau despite a location in the "Old Macau." It's a surprising result because Cotai has been stealing players away from the Macau Peninsula since Las Vegas Sands (NYSE:LVS) completed The Venetian Macau in 2007.

As critical mass has built on Cotai, and the hope was that Wynn Resorts and MGM Resorts (NYSE:MGM) could just stay afloat on the Macau Peninsula until their Cotai resorts are done. So, if Wynn is going to gain market share in the meantime, it's great news.

The numbers
Overall, Wynn's revenue was up 17.9% to $1.52 billion and EBITDA was up 25.1% to $498.4 million. Net income nearly doubled to $213.9 million, or $2.10 per share.

Macau was the clear winner with a 24.6% increase in revenue to $1.12 billion and a 32.1% increase in EBITDA to $374.2 million. Play improved in both the VIP segment, where Wynn specializes, and the mass market.

To give the quarter some context, I've laid out VIP (rolling chip volume) and mass market play (non-rolling chip volume) for Wynn and Las Vegas Sands' two most established resorts: The Venetian Macau and Sands Macau. The Venetian is on Cotai, which is like the Las Vegas Strip of Macau, and Sands Macau is on the older Macau Peninsula with Wynn.

Growth figures are year over year/quarter over quarter. For context, Macau's gaming grew 23.9% year over year in the fourth quarter and 12.3% quarter over quarter.


Rolling Chip Volume

Non-Rolling Chip Volume

Revenue per Room

Wynn Macau

$34.4 billion


$292.9 million




The Venetian Macau

$16.8 billion


$2.3 billion




Sands Macau

$5.8 billion


$1,025 million




Source: Company earnings reports.

The Venetian Macau clearly took a considerable amount of share over the past year, but there's surprising strength at Wynn. I would expect to see slow growth on the Macau Peninsula, but that's not necessarily the case. Sands Macau's VIP play is slowing but the mass market is doing well, and what was shocking this quarter is that Wynn beat Macau's growth both in comparison to last year and last quarter. It's taking share despite having an inferior location.

Wynn Exterior Image

Wynn Las Vegas made $100 million more last year than any other resort in Las Vegas. Source: Wynn Resorts.

I'll also point out that rolling chip volume was more than double The Venetian Macau and larger than that and Sands Cotai Central combined. Las Vegas Sands is clearly winning the mass market, but Wynn is dominating VIP play, so there are two ways to play Macau there.

What this means for gaming companies
If both Wynn and Las Vegas Sands are taking market share, someone is losing it. MGM Resorts and Melco Crown are the two U.S.-traded companies to report next, and I'd say it's more likely that MGM lost ground than Melco Crown on Cotai, but we'll have to see the numbers.

After Las Vegas Sands' strong numbers in Macau earlier this week, it was surprising to see Wynn with a strong quarter as well. This bodes well for the company ahead of the opening of Wynn Palace in almost exactly two years. If Steve Wynn is right, we'll all be wowed by the property and it'll easily be the company's most profitable resort.

Stock picks for growth investors
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

Travis Hoium manages an account that owns shares of Wynn Resorts. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information