Wynn Q1 results top estimates

Wynn Resorts Limited says it expects around a 10 percent decline in its Macau property EBITDA for Y16Q1, approximately 15 percent above analyst estimates.

According to its preliminary expectations of the first quarter financial results, the casino operator says it expects net revenue to decline 14 percent year on year between $603 million to $613 million for the first quarter, compared to $705.4 million the year before.

Adjusted property EBITDA is expected to be between $187 million to $195 million for the first quarter of 2016, compared to the year before.

According to Union Gaming, the expected results are “solid”. On a sequential basis, revenues are expected to grow 9 percent compared to Y16Q4 and EBITDA is expected to grow 19 percent.

The casino operator also adds it expects VIP turnover to decline 21.4 percent to $13.5 billion, down from $17.1 billion in 2015.

Mass market gross gaming revenue was $247.5 million, down 11 percent year on year, and up 8 percent sequentially.

According to Union Gaming, “the sequential growth in mass GGR is another indicator that the worst is likely in the rear view as it relates to this high-margin segment.”

For its Las Vegas operations, Wynn Resorts says it expects net revenue to stay relatively flat year on year, in the range of $384 million to $394 million, compared to $386.9 million generated in the first quarter of 2015.

Adjusted property EBITDA is expected to be between $105 million and $113 million for the first quarter of 2016, compared to $110.7 million last year.

In late January, Morgan Stanley analysts said that Wynn Macau could see short term outperformance ahead of the opening of the new Wynn Palace.

“We conclude that Wynn Macau stock could see short term outperformance ahead of its scheduled opening of Wynn Palace in June 2016. Sustaining the outperformance will depend on its ability to drive market share and EBITDA growth relative to peers,” said the brokerage.

Recently, Wynn Resorts warned that the opening of Wynn Palace may potentially fall into the second half of 2016, as a result of construction delays.

“We would not be surprised to see the opening date pushed back by a couple months,” said Union Gaming, who intends to attend the Wynn Resorts investor conference in Las Vegas on Wednesday.