This week brought about a Q1 2017 financial report from Wynn that handily defeated expectations. The casino giant recently opened a casino in Chinese-controlled Macau, and this alone helped contribute—in a major way—to the revenues earned through the first 3 months of the year.
Steve Wynn, founder of Wynn Resorts Ltd., is the face of a company that has stake in gambling locations in Atlantic City, Las Vegas, Macau, and elsewhere around the world. Like many other casino companies and owners, the last decade or so has not been the friendliest. With that said, the past 12 months have been absolutely off the charts for Wynn, and their venture in Macau is only part of the whole story.
Improving Prospects at Home and Abroad
Wynn’s recent successes are really part of a larger story with regard to Macau’s casinos. For the last 3 years, the Chinese-owned gambling-friendly region of Macau had seen revenues—and, by extension, profits—at major casinos decline rapidly. Experts attribute this to the Chinese government cracking down on supposed corruption on the part of the casino and guests. As a result of the crackdown, some of the wealthiest gamblers who frequented the region decided to either hang it up for a while, or simply venture elsewhere.
In recent months, however, it seems as though the gambling public has gotten over the government crackdown, because from the end of 2016 through March of 2017, growth on the part of Macau casinos has been solid, if not steady.
Painting a picture of this success is the performance of Wynn’s stocks over the past year. Over the last 12 months, Bloomberg reported that Wynn’s stock is up by more than 30%. On Wednesday alone, the stock surged forward on the back of the company’s Q1 performance. Profit per share of stock grew to $1.24 during the first quarter of this year, a number that is far better than the $0.98 profit expectations reported before the calendar turned to 2017. With regard to revenue, Wynn brought in a staggering $1.48 billion. Officially, this is more than 50% better than what was forecast.
For the Macau property alone, earnings came in at $293 million, which was better than the $254 million it was expected to bring in. Having just opened last August, Wynn’s Macau property is looking like it will capitalize nicely on the recent upswing in gambling revenue created in China. Though things got off to an understandably slow start, the resort casino being one of the newest around will more than likely result in it continuing to benefit nicely from Macau’s turnaround. It isn’t only in Macau that Wynn is seeing revenues defeat expectations, as their Las Vegas properties have also began to improve their performance following years of disappointing numbers. With Wynn’s Las Vegas sites expected to be added to in the very near future, it is clear to see that Wynn is attempting to take complete advantage in the uptick of global casino revenues.
Add all of this to the fact that the NFL’s Oakland Raiders will be in town within two years, and I would not be at all surprised to see Wynn’s performance continue to trend higher and higher with each passing quarter.