Wynn Resorts Ltd. Earnings: How Now, Macau?

Macau has kept Wynn climbing, but how long can the good times in the Asian gaming capital last?

Apr 17, 2014 at 11:02AM

On Monday, Wynn Resorts (NASDAQ:WYNN) will release its quarterly report, and recently, investors have started to wonder how much further the casino giant can grow. Although Macau has lifted Wynn's fortunes over the years, competition from Las Vegas Sands (NYSE:LVS), Melco Crown Entertainment (NASDAQ:MPEL), and other players in the gaming industry has only gotten fiercer recently, and Wynn's share price has suffered as a consequence along with the potential for an economic slowdown in China.

At one time, Las Vegas was the center of the gaming world, and Wynn Resorts has made efforts to establish a solid presence there with its namesake casinos on the Las Vegas Strip. But from a profitability standpoint, Macau has been far more lucrative for Wynn as well as Las Vegas Sands and Melco Crown. Wynn has been held back to some extent by failing to establish an early place on the Cotai Strip, but that didn't hold its stock back last year. Still, can shareholders claim even bigger wins in 2014? Let's take an early look at what's been happening with Wynn Resorts over the past quarter and what we're likely to see in its report.

Source: Wynn Resorts.

Stats on Wynn Resorts

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$1.49 billion

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Will Wynn earnings hit the jackpot this quarter?
Analysts have gotten a lot more optimistic in recent months about Wynn earnings, raising their first-quarter estimates by almost 10% and adding $0.60 to $0.65 per share to their full-year projections for 2014 and 2015. The stock, though, has given up ground, falling 2% since mid-January.

Wynn's fourth-quarter earnings report showed just how vital Macau has been to the company's overall success. Revenue jumped 18% from the year-ago quarter, leading to a near-doubling of net income. Despite fears that Las Vegas Sands and its Venetian Macau on Cotai have been stealing Wynn's players from the older Macau Peninsula area, Wynn Resorts revenue from Macau soared almost 25%, with solid gains both from VIP and mass-market players.

Given Macau's success, Wynn Resorts hopes that its Wynn Palace resort on the Cotai Strip will keep its growth accelerating. Currently, Wynn expects the Cotai casino to open in early 2016, having moved up its original projected opening date to try to take advantage of the new area's reputation before it cools off. That could correspond well with plans to improve rail transportation both within Macau and from mainland China, which Wynn and its rivals hope will boost overall traffic and be a win for the entire industry there.

With Macau so important to Wynn Resorts and its peers, it's not surprising that even a hint of weakness can cause ripples throughout the industry. Despite signs that year-over-over revenue during the first quarter rose substantially, one analyst pointed to a dramatic drop in average daily revenue in early April compared to early March, and that was enough to pull down shares substantially. Similar concerns have been a big part of what pulled down Wynn stock by almost 20% from the first week of March to its recent lows.

Another threat that Wynn faces is the prospect of other gaming centers rising throughout Asia. Las Vegas Sands has already led the way with a lucrative resort in Singapore, which has demonstrated its ability to bolster tourist traffic in the region. With Japan seeking to open itself up to casino gaming, Wynn Resorts will have to work hard to ensure that Las Vegas Sands doesn't establish a similar first-mover advantage that could hurt Wynn's chances of matching up to its rival.

In the Wynn Resorts earnings report, watch to see how the casino company's profits are distributed across its geographical reach. With so much attention on Macau, surprisingly good results in Las Vegas or elsewhere could be a catalyst to a rebound for Wynn's much-beleaguered shares.

Six stock picks poised for incredible growth
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.

Click here to add Wynn Resorts to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Dan Caplinger has no position in any stocks mentioned, and neither does The Motley Fool. 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