Please ensure Javascript is enabled for purposes of website accessibility

Wynn's Unreal Q2

By Jeff Hwang - Updated Nov 14, 2016 at 11:29PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Wynn Resorts blows away expectations.

Casino stocks have put in an impressive winning streak in recent years. But as impressive as the second-quarter results that Las Vegas Sands (NYSE:LVS) and MGM Mirage (NYSE:MGM) produced last week were, Wynn Resorts (NASDAQ:WYNN) trumped them both.

Yesterday, Wynn reported stellar second-quarter results well beyond anyone's expectations, posting adjusted earnings of $0.92 per share, compared with the $0.53-per-share analyst estimate. On the announcement, Wynn shares traded up 10% in after-hours trading to a new high of $118.40.

Vegas, baby
The biggest surprise came from Wynn Las Vegas, which managed a whopping 57.6% jump in EBITDA to $115.3 million, largely because of a 40.4% gain in casino revenues to $159.4 million. The company also attributed $7 million of the gain to a higher-than-expected table-game hold percentage. The hotel business wasn't too shabby, either, posting a 7.6% gain in revenue to $74.4 million, with revenue per available room rising 7.4% to $301.

Much like Las Vegas Sands, Wynn saw little apparent impact from new visa restrictions in Macau during the second quarter. Wynn Macau, which opened last September, reported EBITDA of $92.7 million on $352.5 million in revenue. The EBITDA figure was helped by $8 million-$9 million from a higher-than-expected hold, and was up 17% from the first quarter and up 58% from the fourth quarter.

Full speed ahead in Asia
Most interestingly, Wynn is now going ahead with its full Wynn Macau expansion. In the face of uncertainty in light of the newly imposed visa restrictions and new competition, including Melco-PBL's (NASDAQ:MPEL) recently opened Crown Macau, Las Vegas Sands' Venetian Macao (Aug. 28 opening) and MGM Grand Macau (opening in late 2007), Wynn had announced in June that it would open only a portion of its planned expansion project in September.

The company still plans to open only 20,000 square feet of additional gaming space in September, which will include seven VIP gaming tables, 25 mass market tables, 220 slot machines, and a new restaurant. But the company expects to have the full expansion project done by January in time for the Chinese New Year, at which point the property will feature 380 gaming tables and 1,200 slot machines.

The current facility includes 248 gaming tables and 433 slot machines over 110,000 square feet of gaming space.

Fool contributor Jeff Hwang owns shares of Las Vegas Sands and Melco-PBL Entertainment. The Fool has an unbeatable disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Wynn Resorts, Limited Stock Quote
Wynn Resorts, Limited
WYNN
$62.82 (-5.39%) $-3.58
MGM Resorts International Stock Quote
MGM Resorts International
MGM
$33.00 (-7.54%) $-2.69
Las Vegas Sands Stock Quote
Las Vegas Sands
LVS
$33.82 (-2.51%) $0.87
Melco Crown Entertainment Limited Stock Quote
Melco Crown Entertainment Limited
MLCO
$5.34 (-2.73%) $0.15

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
349%
 
S&P 500 Returns
122%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/18/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.