Steve Wynn, CEO of Wynn Resorts, delivers the keynote address at Colliers International Annual Seminar on Thursday, Jan. 15, 2015, at the Boston Convention Center. Wynn says his $1.6 billion resort on the waterfront across Boston will offer the largest hotel rooms outside Las Vegas.
Wynn Resorts, which runs the Wynn and Encore on the Strip as well as properties in Macau, reported its first quarter earnings today.
Company: Wynn Resorts Ltd. (NASDAQ: WYNN)
Revenue:$1.09 billion, down 27.8 percent from the first quarter a year ago. The company attributed the steep drop to a 37.7 percent decrease in net revenue from its operations in Macau.
Loss: $44.6 million, compared to earnings of $226.9 million in last year’s first quarter.
Loss per share: 44 cents, compared to earnings per share of $2.22 in the first quarter of 2014.
What it means: The company approved a cash dividend of 50 cents per common share, a sharp reduction from a dividend of $1.50 in the most recent quarter.
Accordingly, CEO Steve Wynn used much of a conference call with analysts today to reiterate the tough conditions in China that have weighed down his company’s performance. His message was clear: A government-led crackdown on corruption that began last year, curtailing the flow of high rollers to Macau is not letting up. And he doesn’t know if or when it will.
“It is impossible for us to predict how long that will last,” he said. “We’re not in a position to answer those kinds of questions intelligently. We’re only in a position to react intelligently to what we see.”
Net revenue at Wynn Resorts’ Macau operations dropped to $705.4 million for the quarter, compared to $1.13 billion in the first quarter of 2014. Despite the ongoing struggles in the Chinese gambling hub, the company is moving full-steam ahead with construction of its $4.1 billion Wynn Palace, a new resort that it expects to open in 2016 in Macau.
“Wynn Palace will quite simply be the most extravagant and beautiful hotel in the world,” Wynn told analysts. “I don’t think there’s ever been anything quite like what we’re going to show off next year.”
Wynn Resorts had a better quarter in Las Vegas, where net revenue rose 1.6 percent from last year to $386.9 million. Notably, Wynn still expressed skepticism about whether Las Vegas was in the midst of a big recovery, an idea he said was a “complete dream.”
As with its Chinese expansion plans, Wynn Resorts also is pressing ahead with plans to build a casino near Boston.
Wynn told analysts he still was confident in his company’s underlying strength.
“The fundamental health of the company is perfect and without question, and my intention is to keep it that way — without any qualification to that statement,” he said on the conference call.