NEW YORK—Casino operator Wynn Resorts Ltd. reports results for the fourth quarter on Tuesday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: Wynn Resorts, which is led by billionaire Steven Wynn, expanded its Macau resort in December, adding 85 gaming tables and 551 slot machines. The expansion, which also featured a new rotunda entrance, brings the casino resort's total to 390 tables and 1,190 slot machines.
The company said at the time that it planned to add 11 luxury stores in January, and started building another 400 luxury suites and more shopping and high-roller gaming space as part of a second extension known as Wynn Diamond Suites. Wynn said that expansion is scheduled to open in two years.
Las Vegas casino operators have rushed to set up shop in Macau -- a former Portuguese colony -- since the local government ended the monopoly formerly held by businessman Stanley Ho.
BY THE NUMBERS: Analysts surveyed by Thomson Financial predict fourth-quarter net income of 68 cents per share on revenue of $692 million.
ANALYST TAKE: Goldman Sachs analyst Steven Kent said in a Jan. 14 client note that he expects the Wynn Macau expansion that opened in late December to add modestly to quarterly results. He also anticipates the Las Vegas-based company creating a more than $4 billion project on the Cotai Strip as the company has applied for development rights for 52 acres of land there. Kent forecast fourth-quarter earnings of 72 cents per share.
David Katz of Oppenheimer & Co. said Wynn might have a strong quarter, but could see better results from Macau than Las Vegas. In a Feb. 7 note, the analyst estimated quarterly adjusted profit at 71 cents per share.
WHAT'S AHEAD: Wynn, along with other casino operators, will be keeping a close eye on economic conditions during 2008, which could hinder current forecasts. Kent says he does not expect gaming executives to be all that optimistic, as regional gaming revenue has slowed in the past few months and Las Vegas November gaming revenue dropped 19 percent.
Many sectors are struggling with the current U.S. economic climate, as consumers tighten spending on factors including the continued housing downturn, eroding credit conditions and recession fears.
Wynn plans to open its $2.2 billion Encore casino-resort next to Wynn Las Vegas in early 2009.
STOCK PERFORMANCE: Wynn's stock fell 32 percent for the quarter, but gained 17 percent for 2007.
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