Wynn Q3 Macau Revenue Plunges, Boston, Vegas Pleasantly Surprise, More States Eyed for Sports Betting
Posted on: November 5, 2020, 03:15h.
Last updated on: November 5, 2020, 04:12h.
Shares of Wynn Resorts (NASDAQ:WYNN) traded lower in Thursday’s after-hours session. That’s after the gaming company reported a wider-than-expected third-quarter loss on revenue that was lighter than Wall Street forecast.
Dragged down by disappointing results in Macau, its most important market, the Encore operator said the company lost $7.10 a share on revenue of $370.45 million in the July through September period. Analysts expected a per share loss of $4.39 on sales of $434.48 million.
In Macau, where Wynn operates an eponymous integrated resort and Wynn Palace, the top line was $67.1 million, or nearly $100 million below analysts’ projection of $166.1 million. As is the case with rival operators in the world’s largest gaming center, Wynn is scuffling against the backdrop of still-tepid foot traffic, which is pressuring gross gaming revenue (GGR) in the special administrative region (SAR). The company did, however, note that its Macau business is showing signs of life in the current quarter.
In Macau, visitation restrictions have begun to gradually and thoughtfully ease, allowing us to achieve EBITDA break-even in October,” said CEO Matt Maddox in a statement. “We are confident that Macau will continue to benefit from the return of consumer demand as we head into 2021.”
While the company’s numbers in the SAR disappoint, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of -$65.9 million were far better than the loss of $108.9 million analysts expected.
In a normal operating environment, which 2020 clearly isn’t, Wynn derives two-thirds or more of EBITDA and turnover from Macau, underscoring the importance of that market to the company’s top and bottom lines.
In a bit of good news for investors, the operator said weekend leisure demand at its Las Vegas Strip venues was strong in the third quarter, aided by “solid hotel occupancy and casino play,” while Encore Boston Harbor generated record quarterly EBITDA.
Las Vegas operating revenue for the September quarter was $186.7 million, down from $399.5 million a year earlier, while adjusted property EBITDA checked in at $20.3 million. In Boston, where Encore wasn’t open for all of July, adjusted property EBITDA surged to $26 million from $7 million last year. Operating revenue there sank to $116.7 million from $175.8 million in the same period in 2019.
On a conference call with analysts and investors, Wynn Las Vegas President Marilyn Spiegel noted the bulk of the company’s international traffic in Sin City is coming by way of foreign nationals already located in the US, namely Southern California. She called baccarat trends “encouraging,” while noting higher-end customers are visiting more frequently and betting more.
Maddox points out that as part of the operator’s plan to rejuvenate the Las Vegas convention and entertainment business, it will have its own COVID-19 testing site completed by the end of this year. He said it will be saliva-based testing, with results that can be turned around in five or six hours.
In the just-completed quarter, Wynn launched online sports and casino offerings in New Jersey under its WynnBet brand.
“Beyond New Jersey, we have secured market access in numerous other states, and are in the process of applying for licenses on a stand-alone basis in Tennessee and Virginia,” according to the company.
Last week, the gaming firm said it’s applying for a sports wagering license in the Old Dominion State and, as a part of a deal with NASCAR, will build betting lounges at Martinsville Speedway and Richmond Raceway.
The next states for WynnBET launch are expected to be Colorado, Indiana, and Michigan.
Related News Articles
Related News Articles
- April 6, 2021 — 3 Comments—