Print
E-mail
Share
digg
Newsvine
Facebook
Stumble
Technorati
reddit
Fark
twitterWynn Resorts sees profit decline in quarter
Steve Marcus
The Encore hotel and casino is shown to the left of the Wynn hotel and casino on the Strip.
Published Tuesday, Oct. 27, 2009 | 7:46 a.m.
Updated Tuesday, Oct. 27, 2009 | 11:29 a.m.
Wynn Resorts Financial Information
| 3Q 2009 | 3Q 2008 | % Change | 2Q 2009 | |
|---|---|---|---|---|
| Revenue | $773.1 million | $769.2 million | .6% | $723.3 million |
| Net income | $34.2 million | $51.2 million | -33.3% | $25.5 million |
| Net income per share | 28 cents | 49 cents | -42.9% | 21 cents |
Wynn Resorts saw its profit fall during the third quarter as gamblers continued to spend less and operating costs increased due to the addition of Encore Las Vegas.
During a third quarter conference call to investors and analysts, Wynn Resorts Chairman and Chief Executive Officer Steve Wynn discussed the current operating environment in Las Vegas, developments in Macau and the arrival of Garth Brooks.
The company reported net income of $34.2 million, or 28 cents per share for the quarter, compared to net income of $51.2 million, or 49 cents per share in the same quarter of 2008.
Net revenue for the quarter held steady at $773.1 million compared to $769.2 million in the third quarter of 2008.
“In the fourth quarter of last year… as we were getting ready to open Encore, we were saying ‘Boy, this is really tough timing.’ We thought that 2009 was going to be really horrible,” Wynn said. “But if things continue the way they are, we are going to equal or beat what they were in 2008 in Las Vegas and Macau.”
At its Las Vegas operations, Wynn Resorts said its revenue was up 10.2 percent but earnings before interest, taxes, depreciation and amortization were flat because of the cost of operating the Encore resort on the Strip. The $2.3 billion Encore, which opened in December 2008, wasn’t open during the third quarter last year.
Gaming revenue in Las Vegas was $144 million during the third quarter of 2009, flat with the third quarter of 2008.
Occupancy was 83.9 percent during the quarter compared to 96.1 percent during the same period of 2008. Average daily room rates fell from $272 to $210.
Weekday occupancy is still low as the meeting and convention business remains slow in Las Vegas, Wynn said.
“Businesses in America are down and they are cutting back and it’s affecting Las Vegas,” Wynn said.
Wynn, who has partially blamed the decline in the convention industry on President Obama’s remarks about Las Vegas, said little about the administration during the conference call.
The company said its food and beverage revenue in Las Vegas increased 29.8 percent to $96.8 million in the quarter as a result of the additional 12 food and beverage outlets in Encore.
Retail revenue was $21 million in the quarter, 8.6 percent below last year. Entertainment revenue increased 3.9 percent to $16.6 million from the third quarter of 2008 primarily because of the contribution of headliner performances during the quarter, the company said.
“The most difficult to predict part of my business has been the entertainment business. It’s very tricky; it’s very expensive,” Wynn said during the call. “The most powerful, the most desirable of all forms of entertainment is the fascinating power and charm of an individual performer on stage.”
While the cost of having Brooks at the resort is an expensive one, Wynn said the company expects to see a boost in revenue during the fourth quarter because of it. Brooks’ first five weekend shows sold out just hours after tickets were released this past weekend.
“People are coming to Las Vegas who haven’t in a very long time,” Wynn said of those who booked tickets.
Wynn also weighed in on other developments in Las Vegas, calling unfinished projects like Echelon, Fontainebleau and Cosmopolitan “disconcerting.”
“When you look at Fontainebleau, you’re reminded of the chaotic state of some businesses in Las Vegas,” Wynn said.
Aside from Wynn Las Vegas and Encore Las Vegas, Wynn Resorts owns a 600-room hotel and casino in Macau and is in the development process of the Encore at Wynn Macau.
The company said the current budget for the expansion project is $650 million and as of the end of September, it has incurred $375.6 million associated with construction costs at the resort. While Wynn said the company has opened pieces of the resort over the last few days, Encore Macau is expected to be fully complete by April 2010.
“It’s the first building that we had the luxury of building in Macau where we could take advantage of what we’ve learned about our customers,” Wynn said. “The building is specifically designed to the real sensitivities of the people that come to Macau who spend the real money.”
As for new developments in Las Vegas, Wynn said, “Until we understand what’s going on in this country, we will not be expanding anything here. Period.”
Shares of Wynn Resorts were down nearly 10 percent in midday trading.
Discussion: 32 comments so far…
Post a comment
- Most Read
- Discussed
- Most E-mailed
- Metro admits to improper release of criminal history data
- Wonder drug for men no success story
- Locomotives win inaugural UFL championship
- CityCenter: One man’s concept of a real city
- If Palin’s book is so bad, then why is it a best-seller?
- Was a foiled bank heist a cry for help?
- Bellfield tolls again for UNLV in 76-71 win over Louisville
- Metro corrections officer remembered for his love of family
- UNLV recalls last year’s close shave at Louisville
- Live game blog: Bellfield, UNLV come through late, upset No. 16 Louisville
Blogs
The Kats Report
If the message is 'rock out,' then KISS is indeed a message band (1 Comment)
Could a savior of shuttered Las Vegas Art Museum be ... Peter Max? (6 Comments)
For Paul Stanley and KISS, rock and roll is not over (6 Comments)
Twenty years ago today, Human Nature took root on the farm (1 Comment)
Robin Leach's Las Vegas Celebrity Watch
Photo Gallery: Donny Osmond’s triumphant return to the Flamingo
The Kats Report
'DWTS' champ Donny Osmond still deft afoot in return to Flamingo (8 Comments)
Politics: The Early Line
Meeting of GOP governors draws challengers, not Gibbons (5 Comments)
Calendar »
- 29 Sun
- 30 Mon
- 1 Tue
- 2 Wed
- 3 Thu
-
Tahoe Takeover at The Bank
The Bank | 10 p.m. to 11:59 p.m.
-
Playboy Club model search
Playboy Club | 10 p.m. to 11:59 p.m.
-
Queen of Queens at Revolution Lounge
Beatles Revolution Lounge | 10 p.m. to 11:59 p.m.
-
Zowie Bowie's Vintage Vegas Show at Monte Carlo
Lance Burton Theater
The Sun
Locally owned and independent for more than 50 years.
Net revenue is up just under $4 million dollars over last year? That was before Encore opened. Ouch.
Companies can't borrow money to stay afloat or expand but the government sure can lay off them. Its time to end the utterly stupid modified business tax.
Get the money from Garth Brook's fans. If they can be conned to fork over money for him just think of all the other scams they would fall for too!
hey they still made 34 million.think about it.
Good thing Wynn can blame Obama...LOL
The Wynn Resorts now have added two more casinos (Encore and Maccau) and their net income is only apprx. $100M a year and dropping. Using a very generous 10X net income to equate value of equity, the Wynn Resorts equity is only worth $1B for all of the properties.
Once City Center opens expect that annual net income number to drop at least 30-40% as the competition for the high end customer will heat up.
The problem with all of these casino owners, Wynn, Adelson, Ruffin, Kirkorian -- they all have the "little man complex" (none of them are over 5'6")and they are never satisfied with their achievements, so they continue to try to get more and more becuase they are so insecure. They are never satisfied in their personal lives (multiple wives) nor their business lives.
With Echelon putting off their development by another 5 years (plus 2-3 years to complete the construction) expect the north end of the strip to remain "no-mans-land" for another 10 years; that will eliminate the increased foot traffic for Wynn Encore that was expected to come from Echelon and El Ads Plaza casinos.
Just waiting for cry baby Wynn to blame this on Obama, too.
ok, on to the 4th quarter results.....
Getting harder to steal money from the customers.
STEVE WYNN IS VERY ACADEMIC - INTELLECTUAL & CREATIVE -- UNFORTUNATELY -- HUGE SUCCESS HAS CLOUDED HIS THINKING ABOUT HIS ORIGINAL - MEGA STRUCTURE THEME HOTEL CASINOS !!! -- HE HAS EVOLVED TOWARDS BUILDING UPSCALE HOTEL CASINOS THAT ARE NOT THEMES !!! - CAESARS PALACE WAS CREATED IN 1966 BY JAY SARNO & TO DATE NO OTHER HOTEL CASINO THEME IN THE WORLD - UPSTAGES CAESARS PALACE !!! -- STEVE WYNN WITH AGE & SUCCESS HAS LOST HIS MIDAS TOUCH WITH REFERENCE TO UNDERSTANDING WHAT THE UPSCALE MARKET IS REALLY CRYING OUT FOR !!!! - UNFORTUNATELY EGO SOMETIMES IS YOUR BIGGEST ENEMY !!!
WHEN CITY CENTER OPENS - STEVE WYNN WILL LOSE ALOT OF HIS LOYAL FICKLE CUSTOMERS TO CITY CENTER
THE UPSCALE MARKET WILL ALSO LEAVE CITY CENTER & GO TO THE NEXT HIGH CLASS MEGA THEME - THAT IS COMPELLING & THAT STANDS FOR THE LAST WORD IN GLAMOUR - ENTERTAINMENT - PRESTIGE - STATUS & SNOB APPEAL !!! - NEVER UNDER ESTIMATE THE UPSCALE MARKET - THEY WILL PAY A LITTLE MORE AS LONG AS YOU GIVE THEM A VERY CREATIVE UPSCALE PRODUCT - BUILT WITH QUALITY & INFRASTRUCTURE INTEGRITY !!!
I BELIEVE LAS VEGAS WILL BE MUCH STRONGER FIVE YEARS FROM NOW & THE CREATIVE MARKETING ENTREPRENUER THAT STARTS IN 2010 & FINISHES IN 2015 -- WILL BE ON THE MONEY & WILL BE ABLE TO STEAL THE THUNDER AWAY FROM ALL OF THE CURRENT UPSCALE HOTEL CASINOS & WILL BE IN A CLASS ALL BY THEM SELVES !!! -- I AM HOPEFUL - I WILL BE THAT ENTREPRENUER WITH VISION !!!
dgump - your making quite a few assumptions there not to mention Steve Wynn is not under 5'6"...
It is sad to see a business implode on itself from an insider point of view, and when you try to bring this to managements attention they get rid of you. Its almost as if they want the Wynn/Encore to fail. I saw millions of $$ being wasted there, and try to do just that. And was canned. So its not a surprise to see these results. Its like a hole in a bucket, management looks the other way, and Steve Wynn is constantly trying to keep the bucket full. Sorry Steve you should clean your own house then you'll see these numbers get better, until then they will keep getting worse and something will have to give.
I am sure the economy has a lot to do with this, not just the Wynn management style. After all Harrahs posted a loss as well. However, on the other hand you can't give a republican common sense advice because they will do the opposite or won't listen, until they go under or its too late, just look at what happened to Bush.
That's why Weinberg should buy Fontainebleau, to keep control of that area. He has no more space to expand unless he does away with the golf course.
make more and much more new debt to pay back old debt. plus , make sure you get additional space by really raising it up quite a bit.....
PayDay Loan, Insta Cash, Credit Card cash advance , and no real production to be seen anyhwere. Lots of sales-people, consultants and such, but nothing with future.
Now the city is in a big mess. The room rates are rock bottom low and I will take advantage of that. But I will not compensate the casinos buy throwing good money after bad , feeding tight slotmachines. You gotta create better traps than that to get my money. Good luck, fellas.
Well, at least business picked up a little from Q2 to Q3. And better yet, Wynn should be grateful it's still making a profit! After all, Harrah's didn't make ANY profit last quarter.
I just hope Q4 will be a little less bloody than Q3, which mostly seems to be not as bad as Q2. Our economy still looks pretty awful, but I guess it's at least not as bad any more as it was 6 or 12 months ago.
After everything Mr Wynn has said about Maobama...I suppose he isn't looking for bailout money
The housing tax refund is finished, cash for clunkers is finished, too. The stimulus time is over, baby, and the US government will be running out of additional idea and money. In the consequence, it will print new money to keep the idea going that "the recession is over". But it's not. It just looked all right as long as the stimuli went coming from Washington. But this is over now. Another, additional rescue packagages for 150 billion dollars or more are unlikely to happen.
In other words: Fasten Your seat-belts, ladies and gentlemen, we're entering another low pressure front, it's going to be a bumpy ride and there might be a rough landing ahead of us...
Maybe he should raise the price of the grath brooks tickets to $700 instead of the $125.
Critias - just a note, he is going to get rid of it... thats a fact
Steve Wynn is gonna do what all smart business persons are taught to do. He's gonna spruce up the stock to the highest he can get it and SELL OUT, and retire, The poor guy is losing his eyesight and has dumped his wife, and primed for retirement So long suckers!
I remember back in early to mid 80's Slots of Fun had in summer $0.50 Michelob and Heinekin and in the winter $0.25 for both. You should have seen the lines. Wynn should do this to increase profits. Wait that won't work, nobody would gamble.
Slots-of-Fun
They had .10 cent craps too. I loved playing all the numbers, hard ways
all kinds of ways to win and lose, but it would only cost you 2 bucks.
Do you remember the "FREE" champaign fountain too?
Now, Steve would charge $9.00 bucks for a "FREE" Drink
Dont hate Wynn because you cant afford it or dont want to spend that kind of money... Plenty of customers are...
WATCH OUT WYNN, TRUMP IS COMING TO TOWN.
VegasGM85 : your definition of "Plenty" is waning every day. We don't hate Wynn, we dread him on his continued state of denial that things here in Vegas are going down the toilet faster than the water. Someone better stand up to him and change their self destruct course back to the total value vacation for the customers formula, as well as themes and fun, or we are doomed here.
No government bailout for Winn. I wonder if Rush Limpow stayed at his joint or "the other jerks" joint? The guy that makes excuses for China's human right abuses, since he has a big business deal there?
Don't under estimate Steve Wynn. He will come out on top just as he always has.
FREE EDUCATION IN STOCK VALUATION!!!!
Wynn stock is worth $12 a share using 10x net income as a calcuator....most buyers of stock don't know the difference between NOI, net income and gross revenue. Once the public understands that they are buying stock for $60 and getting $1 annual dividends they will see that equates to a 1.5% annual return on their invested dollars. At $20 per share their annual dividend of $1 would equate to a meager 5% return. The Wynn stock is worth $20 at best. TI makes more net income annually ($100M) than the entire Wynn Casinos....ignorance is the reason why there are so many poor/middle class and so few rich....
dgump, you mean, net asset value of the Wynn Vegas stock is not more than 20? Why is the market then saying that "Wynn is worth 52" ?
I think the figures you mentioned are more "realistic" than the current market price, but it's still questionable that it will go back down so much.
Second thing, the Wynn Macau IPO in Hong-Kong , do you know what assets are represented by these stocks? I don't think that all Macau's assets have been "removed" from the Wynn Vegas valuation as I did not see any spin-off or correction from the Wynn stock.
In other words, Wynn Macau's IPO was nothing else but a hidden way of raising funds. It would be interesting to find out what assets the buyer of Wynn Macau and Wynn Vegas are buying when he buys Steve Wynn's stocks.
LVS and MGM are also "examining" the Hong Kong IPO although I am not sure if they just like the idea of getting free addiitional cash without actually giving anything back.
What do you think?
environprotector - What do you want him to do?! He has hired more than any other employer in LV since the beginning of the recession... Everything is getting better no matter how big or small the difference is... (job wise)
FREE EDUCATION IN BASIC ECONOMICS AND SPENDING HABITS:
Once a member of the capitalistic society gets under financial pressure, he/she starts saving up on costs not immediately essential for survival. Gambling/Leisure/Spa Visits / Vacations / Gambling / Dining in fancy restaurants, to name a few.
Well, isn't Vegas all about the just mentioned points? So, once we have this clear, it is obvious that there must be an over-supply of casinos and hotel rooms , slotmachines, gaming tables, restaurants, etc etc. In other words, business goes down, unemployment goes up, people start whining and crying like a baby because they can't pay back their credit card bills any longer. It's them to blame, should never have maxed out their credit cards just to live today and pay back later. Save first and spend later, that's the new way to go.
So, this said we learned that the crisis will not be over so soon, not even if the government says the recovery has kicked in and the GDP is over 3 per cent. My money says: This is simply propaganda bla bla and nothing but hot air. Stimulus packages are running out and the next quarters will show whether the economy is really recovering. I think not.
Greetings