Wynn Resorts posts lower fourth-quarter earnings, cites Macau decline

Wynn Resorts Ltd., owner of Wynn Las Vegas, Encore and resorts in Macau, on Thursday posted fourth-quarter earnings that fell short of analyst expectations as its business in the former Portuguese colony declined by almost 10 percent.

Profit excluding some items totaled $1.17 a share in the quarter, the Las Vegas-based gaming company said in an earnings report. Analysts surveyed by Yahoo Finance were projecting $1.25 a share.

Revenues were $1.28 billion compared to $1.34 billion in the fourth quarter of 2011. A 9.7 percent drop in revenues drove the decline from Macau operations, which were partially offset by a 12.1 percent increase in Las Vegas.

So-called VIP clientele in Macau spent 6.6 percent less at table games in the quarter, while others boosted their activity by 1 percent.

Wynn Resorts said it will double the quarterly dividend to $1 a share, payable Feb. 24 to shareholders of record Feb. 14. The company also paid a special dividend of $7.50 a share in November ahead of an increase in the U.S. tax rates.

Net income at Wynn Resorts fell 41 percent to $111.4 million, or $1.10 a share, from $190.5 million, or $1.52 a share in 2011. The company gets more than 70 percent of its revenue from Macau, with the rest from Nevada.

On a conference call with analysts, Chairman Steve Wynn said within the next week construction will begin on the $4 billion Wynn Cotai resort. He said it was "expensive" to prepare the 52-acre site.

"The resort will include (amenities) that have not been seen before," Wynn said. "We are 36 months out from opening in Cotai."

Wynn criticized those who questioned the potential for continued growth in China.

"The news from China is healthy, Wynn said. "I expect it to continue. Macau is only going to get better with these projects. The future looks good."

He said a lot of intelligent people don't understand modern China. Wynn said they think the country is "way behind the curve," but in terms of politics and economics China is "far beyond where people are giving them credit."

Wynn did not mention company director Kazuo Okada during the conference call. Okada last week filed a lawsuit in U.S. District Court in Las Vegas seeking to stop a Feb. 22 special shareholders meeting to oust him from the board of directors.

Okada in February 2012 was declared "unsuitable" after an investigation concluded he gave cash and gifts totaling $110,000 to gaming regulators in the Philippines. The company sized Okada's 20 percent stake in Wynn Resorts at a 30 percent discount.

For the year, Wynn Resorts posted net revenues of $5.15 billion last year, a 2.2 percent decrease from $5.26 billion in 2011, but mostly in line with analyst expectations.

The Las Vegas-based gaming company attributed the decline in revenues to a 3.2 percent drop in revenues from its Wynn Macau Ltd. subsidiary. Wynn Resorts noted the decline in Asia was partially offset by a 0.4 percent increase in revenues in Las Vegas.

The company earned $4.82 a share on net income of $502 million, compared with $4.88 a share and net income of $613.4 million in 2011.

Wall Street expected revenue of $5.14 billion and earnings of $5.44 per share.

Wynn Resorts reported earnings after the market closed Thursday. Shares of Wynn Resort gained $1.73, or 1.4 percent, to close at $125.22 on the Nasdaq Global Select Market.

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893. Follow @sierotyfeatures on Twitter.