Wynn Resorts' (WYNN) Q4 Earnings Lag Estimates, Revenues Top

Wynn Resorts, Limited (NASDAQ:WYNN) reported mixed fourth-quarter 2018 financial numbers, wherein earnings fell short of the Zacks Consensus Estimate but revenues surpassed the same. This marked the company’s the third straight quarter of earnings miss and second successive quarter of revenue beat.

Adjusted earnings of $1.06 per share lagged the consensus mark of $1.36 and decreased 24.3% on a year-over-year basis. This downside can be attributed to decline in operating income from in Las Vegas operations and Wynn Macau, which overshadowed growth in Wynn Palace operations.

Meanwhile, revenues totaled $1,687.6 million, which surpassed the consensus estimate of $1,573 million. The top line also improved 4% on significant contribution from Wynn Palace and Las Vegas operations, offset by decrease in Wynn Macau operations.

Concurrent with the earnings announcement, the company declared a quarterly cash dividend of 75 cents per share. The dividend will be payable Feb 26, 2019, to its shareholders of record as of Feb 15.

Following the results, shares of the company increased 3.3% in after-hours trading yesterday. In the past three months, the stock has gained 7.8% against the industry’s 0.7% decline.

Wynn Palace Continues to Impress

Revenues from Wynn Palace totaled $740.6 million in the quarter, up 12.8% year over year. Casino revenues summed $636.9 million, up 12.3%. Furthermore, table games turnover in the VIP segment was $16.16 billion, flat year over year. VIP table games win rate (based on turnover) was 3.25%, above the expected range of 2.7-3% and also up from 3.02% witnessed in the year-ago quarter. Table drop in the mass market segment was $1.3 billion, up 15.6% from the year-ago quarter. Meanwhile, table games win in mass market operations amounted to $307.4 million, up 16.2% year over year.

Non-casino revenues summed $103.6 million, up 15.7% from the year-ago quarter. Also, room revenues totaled $44.6 million, up 27.4% from a year ago. Notably, average daily rate (ADR) came in at $277 (up 28.8%), occupancy was 97.2% (up 40 bps year over year) and revenue per available room (RevPAR) was $269 (surged 28.7%).

Wynn Resorts, Limited Price, Consensus and EPS Surprise

Wynn Macau Operations

Wynn Macau revenues decreased 5.2% year over year to $553.4 million in the fourth quarter due to decline in casino revenues.

Notably, casino revenues in the reported quarter decreased 5.9% to $508.9 million. Also, table games turnover in the VIP segment declined 18.2% to $12.78 billion. In the meantime, the VIP table games win rate (based on turnover) was 2.86%, within the expected range of 2.7-3.0% but marginally below the year-ago quarter figure of 2.89%.

Table drop in the mass market segment was $1.26 billion, flat year over year. Table games win in the mass market category amounted to $255.7 million, up 11.2%.

Non-casino revenues came in at $74.4 million, flat year over year. Room revenues were up 17.8% year over year at $29.9 million. RevPAR also increased 16.3% in the fourth quarter to $292. While ADR rose 16.2% to $294, occupancy rate was mostly flat at 99.3%.

Las Vegas Operations

Revenues from Las Vegas operations rose 3.1% year over year to $393.6 million in the quarter under review. The upside can be attributed to decline in both casino and non-casino revenues.

Additionally, casino revenues improved 3.5% to $104.8 million. Meanwhile, table games drop decreased 18% to $508.5 million. Table games win jumped a massive 12.4% year over year to $113.9 million. Table games win percentage of 22.4% was down from 23.5% in the year-ago quarter but within the expected range of 22-26%.

Total non-casino revenues grew 2.9% year over year to $288.8 million. Room revenues were up 10.8% to $117.9 million. During the quarter, RevPAR surged 13% to $279. Occupancy rate was 88.6% compared with 82.1% in the year-ago quarter.

While food and beverage revenues increased 6.1% to $173.2 million, entertainment, retail and other revenues decreased 11.9% to $101.2 million.

Operating Performance

Adjusted property earnings before interests, taxes, depreciation and amortization (EBITDA) increased 4% year over year to $499.4 million on improvement at Wynn Palace and Las Vegas operations.

In the quarter, adjusted property EBITDA from Wynn Macau summed $167.5 million, down 9.9% year over year. The same from Wynn Palace surged 19.2% to $226.6 million. Adjusted property EBITDA from Las Vegas operations rose 1.1% to $105.2 million.

Cash Position

As of Dec 31, 2018, Wynn Resorts’ cash, cash equivalents and restricted cash totaled $2.22 billion.

Outstanding debt at the end of the fourth quarter amounted to $9.42 billion, including $3.10 billion of Wynn Las Vegas related debt, $4.23 billion of Macau debt and $984 million at Wynn America.

Zacks Rank & Other Stocks to Consider

Wynn Resorts has a Zacks Rank #2 (Buy). Other favorably-ranked stocks worth considering in the same space include Churchill Downs Incorporated (NASDAQ:CHDN) , Melco Resorts & Entertainment Limited (NASDAQ:MLCO) and PlayAGS, Inc. (NYSE:AGS) . All these stocks carry the same rank as Wynn Resorts. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Churchill Downs has reported better-than-expected earnings in the training three quarters.

Melco Resorts & Entertainment and PlayAGS long-term earnings are likely to increase by 12.9% and 12%, respectively.

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