May 5, 2009 / 2:02 PM / 10 years ago

UPDATE 3-Wynn Resorts posts first-qtr loss, shares rise

 * Net loss of $33.8 mln, or 30 cents per share
 * Adjusted net loss of 27 cts/shr vs nil/shr est
 * Shares gain 16 pct  (Adds company comment, updates share price)
 By Deena Beasley
 LOS ANGELES, May 5 (Reuters) - Wynn Resorts Ltd (WYNN.O) said on Tuesday it swung to a loss as spending waned in Las Vegas and China’s Macau, but analysts said results were largely in line or better than expectations and shares rose 16 percent.
 Steve Wynn, the casino company’s founder, chairman and chief executive, said he was “cautiously optimistic that maybe we’ve seen the bottom” of the recession-driven downturn.
 “We’ve been noticing that the weekends are getting very strong again,” he said on a conference call with analysts and investors.
 Still, the casino mogul cautioned that the near-term future for Las Vegas hinges on the success of efforts in Washington to jump-start the stalled economy.
 For the first quarter, the company reported a net loss of $33.8 million, or 30 cents per share, compared with net income of $46.7 million, or 41 cents per share, a year earlier.
 The Las Vegas results were “not as bad as feared,” with overall cash flow at the property level in line with estimates, J.P. Morgan analyst Joe Greff said in a research note.
 Excluding one-time items, Wynn posted a loss of 27 cents a share in the quarter, compared with the nil cents a share forecast by analysts, according to Reuters Estimates.
 “Adjusting for unusual items, the results aren’t so terrible,” said Sanford Bernstein analyst Janet Brashear. “They are pretty much in line with MGM, or better.”
 MGM Mirage (MGM.N), the largest Las Vegas Strip casino operator, reported late on Monday a quarterly profit due to a gain on the sale of a resort and said revenue for the first quarter fell 20 percent.
 Despite the opening in late December of Encore, Wynn’s second Las Vegas resort, the company said quarterly net revenue fell 5 percent to $740 million.
 Shares of Wynn were up 16 percent at $49.75 on the Nasdaq, while shares of MGM were up 31 percent at $12.40 on the New York Stock Exchange.
 “MGM is trading on new confidence that the company is solvent. With Wynn, people always believed it was solvent,” Brashear said.
 CEO Wynn said the company has bolstered its balance sheet through equity offerings and amended credit terms, but has no acquisition plans.
 “If the stars line up, we might be an acquirer ... we have no deal cooking,” he said.
 Casino operators have struggled as recession-hit consumers cut back on luxuries like travel at the same time businesses are cutting back on conventions and meetings to trim travel costs and avoid perceptions of frivolous spending.
 Wynn said adjusted earnings before interest, taxes, depreciation and amortization fell 36 percent to $43.9 million at its Las Vegas operations, and dropped 11 percent to $114.6 million in Macau, where the company also operates a casino.
 Wynn is slated to open a second casino in the Chinese gambling enclave next May.
 Las Vegas Sands Corp (LVS.N), which operates two casinos in Macau and two in Las Vegas, is scheduled to report first-quarter results after Tuesday’s market close.  (Additional reporting by Kyle Peterson, editing by Dave Zimmerman and Matthew Lewis)    

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