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Wynn Resorts (WYNN) Stock Down on Q1 Earnings & Revenues Miss

Wynn Resorts, Limited WYNN reported first-quarter 2020 results, wherein both earnings and revenues missed the Zacks Consensus Estimate for the third straight quarter. Following the results, the company’s shares declined 2.8% in after-hour trading session on May 6.

The company reported an adjusted loss of $3.54 per share, wider than the Zacks Consensus Estimate of a loss of $1.05. In the prior-year quarter, the company had reported adjusted earnings per share of $1.61. In the reported quarter, the bottom line was hurt by operating loss at Encore Boston Harbor, Wynn Palace, Wynn Macau, Las Vegas operations and Encore Boston Harbor. During the coronavirus-induced shutdowns in Macau, the company was bearing expenses between $2.2 million and $2.6 million per day.

Following the reopening of Macau casinos, the company witnessed gradual increase in gaming volume from Feb 20 to Mar 20, and expenses declined from $2.5 million per day to $800,000 a day.

Revenues totaled $953.7 million, which lagged the Zacks Consensus Estimate of $1,093 million. The top line also declined 42.3% thanks to dismal performances by Wynn Palace, Wynn Macau and Las Vegas operations. The company’s operations were impacted by the coronavirus pandemic.

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In an effort to maintain sufficient liquidity amid the ongoing crisis, the company has suspended quarterly dividend.

Wynn Palace Disappoints 

Revenues from Wynn Palace totaled $259.5 million in the first quarter, down 64.3% year over year. Casino revenues amounted to $207.6 million, down 66.7%. Rooms, food and beverage, and entertainment, retail and other also declined 54.5%, 53.5%, 39.9%, to $19.7 million, $13.3 million and $18.9 million, respectively.

At the VIP segment, table games turnover was $4.8 billion, down 62% year over year. VIP table games win rate (based on turnover) was 2.9%, within the expected range of 2.7-3% but below 3.91% witnessed in the year-ago quarter. Table drop at the mass market segment was $475.2 million, down 63.6% from the year-ago quarter. Furthermore, table games win in mass market operations amounted to $130.7 million, down 58.6% year over year.

Notably, average daily rate (ADR) came in at $294 (up8.4%), occupancy was 41.6% (97.2% reported in the prior-year quarter) and revenue per available room (RevPAR) was $122 (down 53.8%).

Wynn Resorts Limited Price, Consensus and EPS Surprise

Wynn Resorts Limited Price, Consensus and EPS Surprise
Wynn Resorts Limited Price, Consensus and EPS Surprise

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

Wynn Macau Operations

Wynn Macau revenues were down 56.2% year over year to $229.5 million in the first quarter on account of decrease in casino, rooms, food and beverage, and entertainment, retail and other revenues.

Notably, casino revenues in the reported quarter fell 57.8% to $190.1 million. Rooms, food and beverage, and entertainment, retail and other revenues declined 44.9%, 54.6% and 41.5%, to $15.9 million, $9.5 and $13.9 million, respectively.

Table games turnover at the VIP segment declined 70.9% to $2.9 billion. Meanwhile, the VIP table games win rate (based on turnover) was 4.14%, higher than the year-ago quarter figure of 2.9%.

Table drop at the mass market segment was $578.2 million, down 57.2% year over year. Table games win in the mass market category amounted to $117.9 million, down 55.4%.

Notably, average daily rate (ADR) came in at $321 (up 10.9%), occupancy was 49.2% (compared with 99.3% in the prior-year quarter) and revenue per available room (RevPAR) was $258 (down 45.1%).

Las Vegas Operations

Revenues from Las Vegas operations were down 19.3% year over year to $323.8 million in the quarter under review. The downside can primarily be attributed to the coronavirus-induced shutdowns.

Casino and food and beverage revenues declined 36.2% and 14.3% to $71.3 million and $106 million, respectively. Rooms and entertainment, retail and other revenues also decreased 10.9% and 13.3% to $106.1 million and $40.4 million, respectively.

Further, table games drop increased 2.7% to $414.9 million. Meanwhile, table games win witnessed a sharp decline of 25.8% year over year to $82.7 million. Table games win percentage of 19.9% was down from 27.6% in the year-ago quarter and also below the projected range of 22-26%.

During the quarter, RevPAR improved 7.2% to $299. Occupancy rate was 80.1%, down 250 basis points from the prior-year period. ADR came in at $374, up 10.7%, year over year.

Encore Boston Harbor

The company, which opened Encore Boston Harbor on Jun 23, 2019, reported revenues of $140.9 million. Table games win was 20.8%, abovecompany’s expected range of 16-20%.

Operating Performance

Adjusted property earnings before interests, taxes, depreciation and amortization (EBITDA) came in at negative $5.3 million. In the prior-year quarter, the company had reported adjusted property EBITDA of $494.8 million.

In the quarter under review, adjusted property EBITDA from Macau totaled $29.4 million, compared with $386.5 million reported in the prior-year quarter. Adjusted property EBITDA from Las Vegas operations came in at negative $22.1 million, compared with adjusted EBITDA of $108.3 million.

Cash Position

As of Mar 31, 2020, Wynn Resorts’ cash, cash equivalents and restricted cash totaled $2.89 billion.

Outstanding debt at the end of the first quarter amounted to $11.37 billion, including $3.11 billion of Wynn Las Vegas related debt, $5.15 billion of Macau debt, $2.5 billion of Wynn Resorts Finance debt, and $611.9 million of debt held by the retail joint venture, which the company consolidated.

Zacks Rank & A Key Pick

Wynn Resorts, which shares space with Las Vegas Sands LVS and MGM Resorts International MGM, currently carries a Zacks Rank #3 (Hold).

A better-ranked stock in the same space includes Super League Gaming, Inc. SLGG that carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Super League Gaming have gained 18.6% so far in the year.

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Las Vegas Sands Corp (LVS) : Free Stock Analysis Report
 
MGM Resorts International (MGM) : Free Stock Analysis Report
 
Wynn Resorts Limited (WYNN) : Free Stock Analysis Report
 
Super League Gaming Inc (SLGG) : Free Stock Analysis Report
 
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