LAS VEGAS (AP) — A crackdown in corruption in China that has hushed the once frenzied Macau casino business took its toll on Wynn Resorts Ltd. in the company's fourth quarter.
The company's earnings for the quarter were off by nearly half to $109.3 million and $1.07 per share.
The results did not meet Wall Street's expectations. The average estimate of analysts surveyed by Zacks Investment Research was for earnings of $1.44 per share.
The casino operator posted revenue of $1.14 billion in the period, also falling short of Wall Street analysts' forecasts. Analysts expected $1.24 billion, according to Zacks.
"The fourth quarter was tough," and happenings in China and the spending habits of its richest residents remain uncertain, said CEO Steve Wynn on a Tuesday conference call with analysts. Casinos in Macau relied heavily on high-roller VIPs.
Labor delays, for one, have pushed back the company's opening date of Chinese New Year 2016 for its $4.1 billion Wynn Palace casino-hotel into mid-2016 instead.
"There is nothing to be done but be patient," Wynn said when commenting on what he has learned over time about how to behave in China.
The company has continued to see the fall-off in January with fewer purchases at its Dior, Rolex and Christian Dior shops and its high-end slots off by up to 18 percent, he said. But the silver lining for Wynn and others doing business in Macau has been the regular gamblers, vacationers who are still occupying rooms and making wagers. With that in mind, the company has been adding more tables for those customers.
Wynn talked about the formula that has worked in Las Vegas as he's focused properties there on non-casino experiences recognizing gambling was a result, not the cause of profits. There, room revenue, average daily rates, food and beverages and entertainment and shopping were all up in the quarter compared with a year prior.
The betting games can be found anywhere, but the experience has to be unique, Wynn said. "Every damn slot machine on earth looks like another," he said.
Wynn said Chinese customers aren't all that different from Americans when it comes to selling them on spending at casino-hotels.
"Aspirationaly, all folks are the same," he said. "When they go on vacation, they want to live bigger and better."
He described the Wynn Palace as being a "gilt-edged invitation to that party."
Wynn said his Las Vegas Strip properties, Wynn and Encore, did what no other casino-hotel in America has done in a year's time, hit $515 million in earnings before interest, tax, depreciation and amortization. It's a distinction preferred by the hospitality industry to compare performance over time.
John DeCree, an analyst with Las Vegas-based Union Gaming, said that's true when looking at single properties on the Las Vegas Strip.
"It's a pretty big deal," DeCree said. He said it signals that the company's Las Vegas business is in better shape than in pre-recession 2007, although the company hadn't added the Encore tower by that time. Decree said it sticks with the trend that Las Vegas is rebounding from the recession.
Wynn also confirmed the price tag for his Boston-area casino-hotel has risen slightly from $1.6 billion to as much as $1.75 billion. While Wynn didn't elaborate why, DeCree, the analyst from Las Vegas-based Union Gaming, said it's likely because of design changes. The casino-hotel property will closely resemble that of the Wynn casino-hotel on the Las Vegas Strip.
For the year, the company reported profit of $731.6 million, or $7.18 per share. Revenue was reported as $5.43 billion.
Wynn shares have increased almost 5 percent since the beginning of the year, while the Standard & Poor's 500 index has stayed nearly flat. In the final minutes of trading on Tuesday, shares hit $155.80, a decline of 26 percent in the last 12 months.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on WYNN at http://www.zacks.com/ap/WYNN
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