Wall Street seemed to be in a good mood on Thursday, pushing stock index futures higher. Investors should be able to expect gains of roughly half a percent for the Dow Jones Industrial Average (^DJI -0.98%) and even larger advances for other key benchmarks.
The stock market has seen considerable volatility over the past three years, as the ongoing ripples of the COVID-19 pandemic continue to extend across the global landscape. The economic effects of the pandemic have been far-reaching, and despite eagerness to see things return to normal, some areas have had more success with reopening efforts than others. For a long time, casino stocks were among those hit hardest by the pandemic. Now, though, Wynn Resorts (WYNN -0.47%) and MGM Resorts International (MGM -1.24%) appear to have turned the corner and are looking forward to a full recovery in the key Asian gambling market. Below, you'll learn the latest on how both casino companies performed in their most recent quarters and what the future could hold.
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Wynn looks to win
Shares of Wynn Resorts moved higher by 5% in premarket trading on Thursday morning. The casino giant still hasn't fully recovered from the events of the past few years, but it showed signs of putting its worst times behind it in its fourth-quarter financial report.
Wynn's financial results were mixed. Revenue slipped nearly 5% to $1 billion during the quarter, with decreased activity at its Macao properties offsetting gains for its Las Vegas operations and its Encore Boston Harbor property. Extraordinary items helped Wynn reverse a year-earlier loss with a modest profit, but after accounting for those items, adjusted net losses narrowed only slightly to $1.23 per share.
CEO Craig Billings also gave some upbeat comments about the future. The Wynn executive noted that the Macao government awarded the company with a new 10-year concession, eliminating what had been a major source of uncertainty for the casino operator. In addition, record results in Las Vegas and Boston show that the U.S. economy is back in gear, and Billings was hopeful that the recent surge in visits to Macao for the Chinese New Year holiday season could be the catalyst for a return to growth there.
China's efforts to reopen its economy after a long period of zero-COVID policy have raised expectations that Macao will bounce back more sharply. If that happens, Wynn could be a winner again.
MGM hits the jackpot
Shares of MGM Resorts International did even better, rising 6% in premarket trading. The company's greater focus on Las Vegas and the U.S. market helped it do even better than Wynn in its fourth-quarter report.
MGM's fourth-quarter results included sales of $3.6 billion, up 18% year over year. The casino operator said that an increase in business volume at its Las Vegas Strip resorts helped contribute to the gains, as did better performance from its regional operations segment. Net income more than doubled to $284 million, although after adjusting for extraordinary items that included the disposition of its Mirage property on the Strip, MGM posted an adjusted loss of $1.53 per share.
Vegas-related revenue climbed 27% year over year, as MGM acquired the Cosmopolitan resort, which offset lost revenue after the Mirage sale. Comparable net revenue was 11% higher from year-ago levels. Regional operations saw sales climb 10%. Only MGM's Macao operations weighed on overall results, with the MGM China segment seeing revenue plunge 44% due to ongoing travel restrictions throughout much of the quarter.
MGM is benefiting both from strength in Las Vegas and from better prospects in Macao. If those trends continue, then today's share-price gains could be just the beginning of a longer recovery.
