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Why Wynn Resorts, Limited Popped 15% Today

By Travis Hoium – Feb 12, 2016 at 1:11PM

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Better than expected earnings have the gaming industry hopping today.

What: Shares of gaming company Wynn Resorts, Limited (WYNN -0.90%) surged as much as 15% in trading Friday after the company reported fourth quarter 2015 earnings results.

So what: Revenue declined 16.8% to $946.9 million on a 27% drop in revenue from Macau. Net income was also down 20.2% to $87.2 million, or $0.86 per share. On an adjusted basis, earnings were $1.03 per share, beating the $0.76 Wall Street analysts expected.  

The more encouraging news is that CEO Steve Wynn said Macau's market has improved so far in 2016. Declines in gaming revenue in Macau have been the reason for Wynn Resorts' stock drop for the last two years and that may finally be turning around.

Now what: Beating earnings estimates is great news, but it may be even better if Macau starts to grow ahead of the opening of Wynn Palace. The company's next resort is expected to open in June and it should immediately have a big impact on operations. Until then, even a little good news is positive in the gaming industry and that's why investors are excited about the stock today.

Travis Hoium owns shares of Wynn Resorts, Limited. The Motley Fool has no position in any of the stocks mentioned. 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.

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