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Wynn Casino Achieves Different Results for the Quarter

On October 30th, 2007, Wynn Resorts Limited, the casino organization operated by billionaire Steve Wynn commented that their 3rd quarter profit result dropped down to 94% but their revenue doubled after debuting a casino in Macau. Wynn Resorts Limited's stock plunge down in extended U.S. dealing on rumors that Wynn cannot continue their gain. Revenue improved to 97% to $702.1 million because of the opening of the Wynn Macau Casino late last year.

Wynn Casino's profits were further improved by casino table games like baccarat and blackjack where Wynn won cash at a bigger percentage than the casino industry average during the period. Market analysts commented that investors may be wary that the gains will not be permanent. Michael Rudolph, a fund manager working with Gardner Lewis Asset Management in Chadds Ford, Pennsylvania said that a lot of people just thinks that Wynn Casino is just plain lucky.

Wynn Casino slid down to $7.90 or 4.7% to $160 in trading after the U.S. markets closed down. Earlier during trading, Wynn's shares slid down to 2.9% to $167.90 in the NASDAQ Stock Market composite trading. It improved 79% this year. Net profit slide down to $44.7 million or 41 cents per share from $715.7 million or $6.43, a year earlier. In 2006, Wynn had a good gain after it sold the rights to construct a casino facility in Macau.

Back in 2006, Wynn Resorts sold their rights to construct a casino in Macau for $900 million to PBL Limited and Melco International Limited by Lawrence Ho. The casino management is expanding in the former colony, which surpassed Las Vegas as the biggest casino industry in the world.

Profits before taxes and other expenses at the Wynn Las Vegas casino increase 21% to $93.2 million helped casino table games winning percentage of 26.4%, bigger than the range of 21% to 24% the company prediction. Wynn achieved quarterly winning percentages of between 24% and 27.6% in 2006.

Steve Wynn, the CEO of Wynn Casino commented on a call with the shareholders that the company will construct a high-class casino with at least 1,500 hotel rooms on the Cotai Strip in Macau. It will go head to head with the Venetian Macau, which opened in August with 3,000 rooms.

Aside from the one-time expenses and gains, revenue was at 67 cents per share. Analysts predicted earnings of around 60 cents per share based on the average of nine predictions collected by Bloomberg. The profit estimate was $629.1 million, aside from the $48.7 in promotional costs.

 

Sunday, November 18 , 2007
Brian Letendre