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Wynn Resorts (WYNN) Q3 Earnings Miss, Revenues Top Estimates

Wynn Resorts, Limited WYNN reported mixed third-quarter 2021 results, wherein earnings missed the Zacks Consensus Estimate but revenues beat the same. The top line surpassed the consensus mark for the second straight quarter. Both the metrics also improved on a year-over-year basis.

The company’s results in the quarter benefited from robust casino, rooms, and food and beverage revenues.

Matt Maddox, CEO of Wynn Resorts, stated, “With our recent investments in innovative food and beverage offerings, a new convention facility in Las Vegas and a revamped casino loyalty program, the best days are ahead for our business in North America. And while there have been some fits and starts along the road to recovery in Macau, we are confident that Macau will benefit from the return of consumer demand as we progress through 2022.”

Q3 Earnings & Revenues

The company reported an adjusted loss of $1.24 per share, wider than the Zacks Consensus Estimate of a loss of $1.17. In the prior-year quarter, the company had reported an adjusted loss of $7.04 per share.

Revenues in the third quarter were $994.6 million, beating the Zacks Consensus Estimate of $987 million. In the prior-year quarter, the company reported revenues of $370.5 million. The company benefited from solid contributions of Wynn Palace, Wynn Macau and Las Vegas operations.

Wynn Resorts, Limited Price, Consensus and EPS Surprise

Wynn Resorts, Limited price-consensus-eps-surprise-chart | Wynn Resorts, Limited Quote

Wynn Palace Operations

During the third quarter, Wynn Palace revenues were $181.3 million compared with $15.7 million in the prior-year quarter. Casino revenues in the reported quarter totaled $134.1 million compared with $12.3 million in the prior-year quarter. Rooms and food and beverage revenues surged 247.1% and 59.7% year over year to $15.6 million and $10.9 million, respectively. During the quarter under review, entertainment, retail and other was $20.7 million, against ($8 million) reported in the prior-year quarter.

In the VIP segment, table games turnover was $1,234.7 million, up 296.2% year over year. VIP table games win rate (based on turnover) was 4.45%, higher than the expected range of 2.7-3%. Also, it was above 1.04% reported in the prior-year quarter. Table drop at the mass market segment was $508.8 million compared with $86.3 million in the prior-year quarter. Table games win in mass market operations amounted to $110.8 million compared with $19 million in the prior-year quarter.

During the reported quarter, RevPAR soared 273.1% year over year to $97. Occupancy levels in the segment moved up to 51.9% compared with 11.6% in the prior-year quarter. However, average daily rate (ADR) was $187, down 16.9% year over year.

Wynn Macau Operations

During the third quarter, Wynn Macau revenues amounted to $130.7 million compared with $51.4 million in the prior-year quarter. The upside was primarily driven by a rise in casino, rooms, food and beverage, and entertainment, retail and other revenues.

Casino revenues in the reported quarter were $98.3 million, up 261.9% year over year. Rooms and food and beverage revenues surged 120.7% and 36.1% year over year to $10.9 million and $7.6 million, respectively. During the quarter, entertainment, retail and other revenues rose 1.5% year over year to $13.9 million.

Table games turnover in the VIP segment increased 167.9% year over year to $1,335.7 million. However, the VIP table games win rate (based on turnover) was 2.44%, lower than the expected range of 2.7-3.0%. The figure was below 3.95% in the prior-year quarter.

Table drop at the mass market segment was $441.9 million compared with $133 million in the prior-year quarter. Meanwhile, table games win in the mass market category was $87.1 million compared with $24.9 million in the prior-year quarter.

During the reported quarter, RevPAR increased 125% year over year to $108. Occupancy levels in the segment moved up to 51.3% compared with 16.6% in the prior-year quarter. However, ADR came in at $211, down 27.5% year over year.

Las Vegas Operations

During the third quarter, revenues from Las Vegas operations were $476 million, compared with $186.7 million in the year-ago quarter.

Casino revenues surged 71.4% year over year to $112.6 million. Meanwhile, revenues from food and beverage, rooms, and entertainment, retail and other improved 227.8%, 195.2% and 139.4% year over year to $180.5 million, $132.7 million and $50.3 million, respectively.

Table games drop increased 56.1% year over year to $507.2 million. Table games win surged 68.1% year over year to $110.3 million. During the third quarter, table games win percentage of 21.7% was within the projected range of 22-26% and above 20.2% reported in the prior-year quarter.

During the quarter under review, RevPAR soared 210.5% year over year to $326. Occupancy rate came in at 83%, up from 39.2% in the prior-year quarter. ADR was $392, up 45.7% year over year.

Encore Boston Harbor

During the third quarter, revenues from Encore Boston Harbor operations amounted to $192.2 million. During the quarter, table games win percentage of 21.4% was within the projected range of 18-22% but marginally below the prior-year quarter figure of 21.8%.

During the reported quarter, RevPAR increased 43.9% year over year to $308. Occupancy rate came in at 87.8%, up from 72.7% in the prior-year quarter. ADR was $351, up 19.4% year over year.

Operating Performance

During the third quarter, adjusted property earnings before interests, taxes, depreciation and amortization (EBITDA) was $154.6 million against $(65.9) million in the prior-year quarter.

In the quarter under review, adjusted property EBITDA from Macau totaled $10.1 million against $(112.1) million reported in the prior-year quarter. Adjusted property EBITDA from Las Vegas operations was $183.4 million against $(20.3) million reported in the year-ago quarter. Meanwhile, adjusted property EBITDA from Encore Boston Harbor was $64.6 million compared with $26 million in the prior-year quarter.

Cash Position

As of Sep 30, 2021, Wynn Resorts’ cash and cash equivalents totaled $2.48 billion compared with $2.80 billion as of Jun 30, 2021.

Total current and outstanding debt at the end of the third quarter amounted to $11.74 billion, including $3.13 billion of Wynn Las Vegas related debt, $5.77 billion of Macau debt, $2.23 billion of Wynn Resorts Finance debt and $612.8 million of debt held by the retail joint venture, which the company consolidated.

Zacks Rank & Key Picks

Wynn Resorts currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks worth considering in the same space include Churchill Downs Incorporated CHDN, Golden Entertainment, Inc. GDEN and Accel Entertainment, Inc. (ACEL). Churchill Downs and Golden Entertainment sport a Zacks Rank #1 (Strong Buy), while Accel Entertainment carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Churchill Downs’s fiscal 2022 earnings is likely to witness growth of 37.8% year over year.

Golden Entertainment has reported better-than-expected earnings in each of the trailing three quarters.

Accel Entertainment fiscal 2022 earnings is likely to witness growth of 34.7% year over year.


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