On the strength of a 41.7 percent revenue increase in Macau, Wynn Resorts posted a big gain in earnings for the third quarter ended September 30, though not enough to satisfy investors, who were expecting more.
Net revenues for the third quarter of 2011 were $1.3 billion, compared to $1.0 billion in the third quarter of 2010. The increase was driven primarily by a Wynn Macau, which saw net revenues grow to $951.4 million from $671.4 million in the third quarter of 2010.
Net income was $127.1 million, compared with a net loss of $33.5 million in the third quarter of 2010, which included a $64.2 million loss on extinguishment of debt. Adjusted net income was $132.6 million compared with $48.7 million, in the third quarter of 2010.
Adjusted earnings of $1.05 per share fell short of Wall Street’s average estimate for $1.18 per share. Share prices were down 5.4 percent for the day after the earnings announcement.
Wynn Macau’s EBITDA in the third quarter of 2011 was $296.0 million, up 49.5 percent from $198.0 million in the third quarter of 2010. Table games turnover in the VIP segment was $31.4 billion for the third quarter of 2011, a 45 percent increase from $21.7 billion in the third quarter of 2010. VIP table games win as a percentage of turnover (calculated before discounts and commissions) for the quarter was 2.95 percent, in-line with the expected range of 2.7 percent to 3 percent and higher than the 2.88 percent experienced in the third quarter of 2010.
Table games drop in the mass market category was $704.3 million during the period, a 16.4 percent increase from $605.1 million in the third quarter of 2010. Mass market table games win percentage (calculated before discounts) was 27.7 percent, an improvement over the 22.8 percent generated in the 2010 quarter. Slot machine handle increased 6.9 percent to $1.1 billion as compared to the prior year quarter. Win per unit per day was 29.3 percent higher at $696, compared to $538 in the third quarter of 2010.
On the hotel side, Wynn Macau achieved an Average Daily Rate (ADR) of $315 for the third quarter of 2011, 9.7 percent above the $287 reported in the 2010 quarter. The property’s occupancy was 93.7 percent, compared to 87.6 percent during the prior year period, and revenue per available room (REVPAR) was $295 in the 2011 quarter, 17.3 percent above the $251 reported in the prior year quarter.
Gross non-casino revenues at Wynn Macau increased 32.4 percent during the quarter to $102.6 million, driven by strong performance from all non-casino segments.
Net revenues for Wynn’s Las Vegas operations were $346.9 million, 3.7 percent higher than in the third quarter of 2010. Adjusted property EBITDA of $85.1 million (with a 24.5 percent EBITDA margin on net revenues) was up 11.3 percent versus the $76.5 million generated in the comparable period in 2010.