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Wynn reports loss in fourth quarter

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Steve Marcus

The Encore is shown to the left of the Wynn Las Vegas on the Strip.

Updated Tuesday, Feb. 24, 2009 | 4:10 p.m.

Wynn Resorts Financial Information

  4Q 2008 4Q 2007 % Change 3Q 2008
Revenue $614.3 million $711.3 million -14 % $769.2 million
Net income ($159.6 million) $65.5 million -- $51.1 million
Net income per share ($1.49) 57 cents -- 49 cents

Wynn Resorts today reported it fell to a fourth quarter loss because of a $98.8 million tax expense in the quarter.

Wynn reported a net loss of $159.6 million, or $1.49 per diluted share, compared to a profit of $65.5 million, or 57 cents per diluted share, in the comparable period of 2007.

During the quarter, which ended Dec. 31, 2008, Wynn Resorts’ net revenue was $614.3 million, compared to $711.3 million in the same period of 2007.

The company attributed the decrease to a decline in the number of gamblers, a lower hold percentage and a reduction in non-gaming revenues in Las Vegas.

Las Vegas net casino revenue was $90.7 million for the quarter, compared to $160 million in 2007. Non-casino revenues in Las Vegas fell 16.9 percent to $171.9 million during the quarter. Room occupancy at Wynn Las Vegas decreased from 94.3 percent to 79.7 percent. Average daily room rates dropped from $298 to $281.

“There’s no good news. Business is tough in Las Vegas” owner Steve Wynn said in an earnings call today. “We are in the mode of protecting our culture, protecting our employees and seeing this thing through but it’s not a very good time to make money.”

Wynn also said cutbacks in consumer spending have affected his luxury resorts.

“People with money who stay at a hotel like ours are being very careful if they have money. It may be one of the reasons some of the lower-end places perform a little better than a high-end place like Wynn or Encore,” Wynn said.

Wynn said during the call that the company has $5 billion in assets and owes $2.8 billion. Aside from Wynn Las Vegas and Encore Las Vegas, Wynn Resorts owns a 600-room hotel and casino in Macau and has begun construction on the $700 million Encore at Wynn Macau.

Earlier this month, Wynn initiated a cost-reduction program for its Las Vegas properties that includes salary reductions for salaried employees, reduced work weeks for full-time hourly workers, the elimination of 2009 bonuses and a suspension of the company match to employee 401(k) plans. The plan is expected to save the company $75 to $100 million a year.

Wynn president Andrew Pascal said the plan is now saving the company $250,000 a day.

Shares of Wynn Resorts were up nearly 11 percent during normal trading on the New York Stock Exchange but tumbled $4.84, or nearly 19 percent, in after-hours trading. The company released its earnings after the close of the trading day.

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