Wynn posts 4th-quarter earnings on strength of Macau operations

Kin Cheung / AP

The fountain of the Wynn Macau casino performs celebrating its opening with the backgroung of the Lisboa Casino in Macau, Tuesday, Sept. 5, 2006. American gaming mogul Stephen Wynn was ready to throw open the doors of his new US$1.2 billion casino to gamblers Wednesday in Macau _ the Chinese territory that’s rivaling the Las Vegas Strip as the world’s epicenter for gambling.

Las Vegas-based Wynn Resorts Ltd., operator of the Wynn and Encore resorts on the Strip and properties in Macau, reported its fourth-quarter earnings Thursday.

Company: Wynn Resorts Ltd. (Nasdaq: WYNN)

Revenue: $1.52 billion (up 17.9 percent from the fourth quarter of 2012). Revenue in Macau soared by 24.6 percent while Las Vegas was up 2.4 percent.

Earnings: $213.9 million (up 92 percent from the fourth quarter of 2012). For all of 2013, Wynn reported earnings of $1.29 billion, $7.17 a share, on revenue of $5.62 billion.

Earnings per share: $2.10 (up 90.9 percent from the fourth quarter of 2012).

What it means: As was the case with his Strip neighbor, Las Vegas Sands, Wynn Resorts’ fourth-quarter earnings were primarily driven by results in Macau.

“The numbers, as always, speak for themselves,” said company chairman Steve Wynn in a conference call. “For two hotels to have a cash flow of a billion and change is very satisfying.”

Wynn was generous in his praise of Sands chairman Sheldon Adelson and his team and gave a collective pat on the back to Adelson, MGM Resorts International and himself for the work they’ve done in Macau.

“Were it not for our ability to conduct business in Macau, all of the current energy on the Strip would evaporate,” he said. “Our customers bring money in from abroad. We are an exporting industry and we’re stabilizing the employment base of this state by operating in Macau.”

Wynn said his company was successful because of its focus on quality. He vowed that when his $4 billion, 1,700-suite Wynn Palace on the Cotai Strip was completed in 2016, he wouldn’t allow the Encore on the Macau peninsula “to become a stepchild.”

“We don’t intend to give up any ground on the peninsula,” Wynn said. “The Wynn and the Encore (in Macau) both received five-star status. There are only four or five in all of China,and we have the only ones in Macau.”

While the Wynn Palace is targeted to open two years from this week, Wynn said he’s already working on the second phase of that project. He said the expansion would come two years after the Wynn Palace opening with 1,500 additional suites that would each include a living room, massage room and his-and-her bathrooms.

While Las Vegas growth was overshadowed by Macau, Wynn said the company was seeing an uptick in convention bookings, retail sales, room rates and occupancy on the Strip.

“I would not claim that Las Vegas is booming,” he said. “The Affordable Health Care Act is still continuing to hit us and we’ve struggled to overcome that. Nothing that has come out of Washington has done anything but add to our operating expenses.”

Wynn believes his proposed $1.5 billion Massachusetts resort would win approval and that opportunities in Japan and Korea await because of his company’s successful track record in Las Vegas and Macau.

“We were licensed in Macau because of our track record with Bellagio and the Mirage,” Wynn said. “If Japan decides to pursue the development of a resort, they’ll have the Wynn Palace to see right in their own backyard.

“We intend to take that kind of competitive edge and stick with it. We’ll put our credentials up and right now, I’m comfortable standing on our track record.”