NEW YORK - Wynn Resorts Ltd. reported Thursday that its second-quarter earnings more than tripled compared to last year due to a hefty tax benefit and strong revenue growth at the Las Vegas-based casino operator's Macau property.
Earnings for the quarter ended June 30 jumped to US$272 million, or $2.42 per share, from $89.6 million, or 82 cents per share, in 2007. The results included a $140.7-million deferred-tax benefit.
Excluding special items, profit rose 23.3 per cent. It totalled $124.3 million, or $1.11 per share, compared with $100.8 million, or 92 cents per share, in the second quarter last year.
The tax benefit related to foreign tax credits for Wynn Macau, which were included in the company's U.S. tax expense in prior years. Wynn said it recorded the benefit after a study of the taxes levied on those operations under Macau law.
Revenue rose 20 per cent to $825.2 million, driven by a 50 per cent revenue increase at Wynn Macau. At Wynn Las Vegas, net casino revenue fell 24 per cent.
Analysts surveyed by Thomson Financial, who generally exclude special items, forecast earnings of 93 cents per share on revenue of $828.1 million.
"The report again highlights the severity of the slowdown in Vegas and commentary from Mr. Wynn did nothing to alleviate concerns," said Thomas Weisel Partners analyst Jake Fuller in a note to investors.
Fuller noted that the company's earnings got another boost from lighter-than-expected interest expense.
Earlier this month, Wynn had warned investors about the shortfall in operating income for its Las Vegas property so the results did not surprise investors.
Wynn said then that the property also booked a lower-than-normal hold percentage, which is the amount won the casino as a percentage of the total amount wagered.
The Las Vegas property's revenue per available room, or revpar, fell three per cent to $292 during the period as occupancy slipped. Revpar is considered a key gauge of a hospitality company's performance.
The Las Vegas gaming market has been struggling with the impact of soaring gas prices and reduced airline capacity into the city.
"We're not sure what it will mean, but it's part of the passing parade and the current short-term environment," Wynn said in a conference call with investors. "I don't think - as an operator, there's not a hell of a lot you do about it. You're not going to change your way of doing business."
"If there's less traffic, then you make less money. Period," Wynn added.
Revpar at Wynn's Macau property, meanwhile, surged 9.9 per cent to $244.
Wynn also provided an update on its Encore resort, to open adjacent to Wynn Las Vegas in December. The budget for Encore and related improvements is about $2.3 billion. As of June 30, Wynn had incurred about $1.5 billion of the project costs.
The company began construction of another Encore at Wynn Macau in 2007 and expects that property to open in the first half of 2010. As of June 30, Wynn has incurred $114.1 million of the expected $700 million cost of Wynn Macau.
Wynn shares dipped $1.09 to $90.50 in after-hours trading, after dropping $8.22, or 8.2 per cent, to $91.59 during the regular session. The stock has traded between $69.27 and $176.14 during the past 52 weeks.
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