Though its press release remained upbeat while reporting the company's third-quarter 2020 results yesterday after market close, casino and resort operator Wynn Resorts (WYNN -2.25%) fell strongly short of Wall Street analyst expectations. Zacks Equity Research reports a negative 112% earnings surprise, with analyst consensus expecting a loss per share of $3.32 and actual losses of $7.04 per share. Zacks also notes Wynn has missed consensus earnings per share (EPS) four quarters in a row.
Revenue also fell short of the mark, delivering an approximate negative 19.5% surprise below expectations, clocking in at $370.5 million, or a 77.5% year over year plunge from Q3 2019's $1.65 billion in revenue. Wynn notes its net Q3 losses include $407.4 million in income taxes "related to an increase in the valuation allowance against deferred tax assets no longer expected to be realized."
Despite the misses the company asserts a recovery is under way. In the follow-up Q3 conference call, CEO Matt Maddox highlighted positive events happening after the quarter's Sept. 30 end, noting that in October the company "went from 10% of our normal visitor volumes, up to almost 30%," while in November's early days approximately 6,000 people visited Wynn's Macao properties daily (compared to 18,000 before COVID-19).
While China's Golden Week national holiday provided a much-needed boost to Wynn's fortunes, the company's stock remains well below pre-pandemic levels. Wynn has a sports betting service, WynnBET, which recently forged a partnership with NASCAR, but the company's entry into digital sports betting, the explosive growth market of 2020, appears slower than that of rivals.
Unless WynnBET catches up to rival offerings such as Caesars Entertainment's potentially highly lucrative William Hill acquisition, Wynn's relatively limited online sportsbook presence could prove a handicap going forward.