Wynn Resorts Falls After Original Macau Casino Posts Sales Drop
(Bloomberg) -- Wynn Resorts Ltd. tumbled as much as 9.7 percent in late trading after reporting steep declines in revenue and profit at its original casino in Macau, the company’s biggest market.
While overall sales rose 9 percent in the second quarter to $1.61 billion, the total fell short of analysts’ estimates of $1.67 billion. Earnings of $1.53 a share, excluding some items, trailed projections of $1.92 a share.
The Las Vegas-based casino giant said Wednesday that revenue fell 15 percent at the Wynn Macau, driven by a decline in betting by high-rollers. Sales at the two-year-old Wynn Palace, on Macau’s Cotai Strip, jumped 57 percent, raising the possibility that the newer resort is cannibalizing the older one. Earnings at the company’s Las Vegas casinos fell 6.1 percent.
“Wynn Macau had a tough VIP environment on lower volumes from several junket operators as several competitors got back into the game with new rooms and more credit,” Chief Executive Officer Matt Maddox said on a call. “Wynn Macau won’t compete on price.”
Shares of Wynn were down 8.5 percent to $146.35 in late trading, after falling as low as $144.55. The stock is down 5.1 percent this year.
Casino operators in Macau, the world’s largest gambling market, tumbled in U.S. trading, after betting revenue grew less than expected in July.
The stocks also took a beating after Caesars Entertainment Corp., the largest casino owner in the U.S., said room revenue in the third quarter would be light due to fewer events in Las Vegas and competition from rival operators for leisure travelers.
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