Casino mogul Steve Wynn still ‘very bullish on Macau’

The Wynn Macau and Encore towers, looking fairly familiar.

Wynn Resorts, which runs the Wynn and Encore properties on the Strip in addition to resorts in Macau, reported its third quarter earnings today.

Company: Wynn Resorts Ltd. (NASDAQ: WYNN)

Revenue: $1.37 billion, down 1.4 percent from $1.39 billion in last year’s third quarter. The drop was driven by a 5.6 percent decline in net revenue from operations in Macau, partially offset by a 9 percent net revenue increase in Las Vegas, the company said in a statement.

Net income: $191.4 million, up 5 percent from $182 million in the third quarter of 2013.

Earnings per share: $1.88, up 5 percent from last year’s $1.79.

Click to enlarge photo

Steve Wynn

What it means: Wynn Resorts Chairman Steve Wynn theoretically has reason to be worried about Macau, where gambling revenue has declined now for four straight months. Sounding not unlike Las Vegas Sands CEO Sheldon Adelson, however, Wynn told investors in a conference call that he’s confident in Macau’s outlook.

Like other major casino operators, Wynn continues to bet big on Macau. The company is building another resort there, called Wynn Palace, which has a project budget of about $4.1 billion, the company said. The new resort should open in the first half of 2016, and Wynn told investor the project is on time and on budget.

Revenue from Wynn’s Las Vegas operations, though still not half the company’s $942.3 million net revenue from Macau, performed well year over year. Las Vegas net revenue increased 9 percent to $427.8 million from $392.5 million in last year’s third quarter.

The company recorded increases in all major categories in Las Vegas.

Net casino revenue increased 10.5 percent from last year to $178.6 million; room revenue increased 7.2 percent to $102.5 million; food and beverage revenue increased 5.8 percent to $136.4 million; and other revenue — including entertainment and retail — increased 1.8 percent to $59.1 million.

But Wynn has his sights set beyond Las Vegas and Macau. He just won approval from Massachusetts regulators to build a casino near Boston, although its fate depends on whether the state’s voters approve a ballot measure next week to ban casinos.

In the conference call, Wynn said his company plans to create a resort in Massachusetts “that has never been seen before in any city or any country, including in our own buildings.”

“We’ve taken an approach to Boston that is dramatically different than any casino presentation that has been seen in our industry historically,” he said. “I don’t think in my 40-odd years I’ve ever been as excited about a project as we are about Boston.”

Quote: “Generally speaking, we were happy with the third quarter...I don’t know whether it’s a squall or we’re in the rainy season or how long it will last, but we’re still very, very bullish on Macau...Things happen in China at their own pace and in their own time, and for those of us who are lucky enough to be in business there, you have to sit there and go along with the program and adjust to it as best you can.” — Steve Wynn