What happened
Shares of casino company Wynn Resorts (WYNN -1.88%) jumped as much as 9.9% in trading Friday after the company reported fourth-quarter 2020 results. Shares traded higher throughout the day and were up 6.8% at 1:30 p.m. EDT.
So what
Quarterly revenue dropped 58.5 million to $686 million, well short of the $751 million analysts expected. Adjusted loss was $2.45 per share, slightly worse than the $2.22 Wall Street expected, and down from a $0.62 per share profit a year ago.
Image source: Getty Images.
Past results may not have been impressive by any measure, but what investors are really focused on is the future. Management said it's seen an uptick in bookings in the last two weeks and convention bookings for the third and fourth quarters of this year are about in line with 2019 levels. Wynn is even planning for a health passport system, where convention guests can confirm they've received a vaccine or can receive rapid COVID-19 tests.
On the online gambling side, Wynn said it already has a run rate of about $50 million in revenue from Wynn Interactive, showing potential with only five states currently operational.
Now what
Investors are starting to see a path to recovery for consumer discretionary stocks like Wynn Resorts. Vaccines are rolling out, bookings for late in the year are picking up, and it's possible that margins will be unusually high after all of the cost-cutting over the past year. That could drive a sharp rise in profits, which is what investors are betting on with Wynn Resorts today.
