Wynn Resorts (NASDAQ: WYNN) stock surged above 4% after the bell after the casino operator reported better-than-expected second quarter results. All the core properties saw solid revenue growth over the prior year. The stock price has increased by 13% this year.
Revenue rose 3.3% to $1.66 billion aided by growth in all three properties. Wynn Palace revenue grew $8.3 million; Wynn Macau saw $3.2 million growth and Las Vegas Operations rebounded with $22.6 million increase in sales.
Adjusted earnings contracted to $1.44 per share, down 9 cents over last year. The street was anticipating revenue of $1.6 billion and adjusted earnings of $1.44 per share. The board also declared a cash dividend of $1 per share with the record date set as August 16.
Commenting on the Q2 performance CEO Matt Maddox said: “We were pleased to deliver year-over-year revenue growth at all of our properties in the second quarter, with particular strength in our core mass business in Macau and REVPAR in Las Vegas.”
New Projects Update
In June, Wynn opened the $2.6 billion Encore Boston Harbor casino resort in Everett, Massachusetts. During the Q2 period, the new resort had eight days of operations. For those eight days, operating revenues came in at $18.8 million.
Wynn has earmarked $425 million for the golf course revamp and construction of a new convention facility. The company expects to open the revamped golf course in the fourth quarter of 2019 and the 430,000 square foot convention facility is slated for opening in the first quarter of 2020.
Core Properties Review
Wynn Palace occupancy improved 1.2% to 97.4% aided by strong performance from the mass market offset by muted performance from the VIP segment. RevPAR rose 5% to $258 over prior year period.
Wynn Macau occupancy decreased 0.5% to 98.9% dragged by the poor performance from the VIP segment. RevPAR growth of 3% was helped by solid growth from the mass market segment.
It’s worth noting that Macau Operations performance was dragged by the ongoing trade war between the US and China and it’s going to be a headwind for the casino industry until things come back to status quo.
Las Vegas came back strongly from the past quarter performance. Occupancy rose 2.4% resulting in the RevPAR inching up 9.5% to $300.
Revenue decreased 3.7% to $1.65 billion over last year due to muted performance from the gaming revenues and retail offerings. Adjusted earnings were down 30% to $1.61 per share due to the impact of one-time regulatory expenses last quarter.
Occupancy increased in Wynn Palace and Wynn Macau offset by drop in Las Vegas Operations. On the revenue per available room (RevPAR) front, Wynn Palace saw 8% jump while Wynn Macau reported flat revenues. Las Vegas Operations saw a 2% dip in revenues to $279.
The company hasn’t provided any guidance for the third quarter. However, analysts are anticipating revenue of $1.77 billion and adjusted EPS of $1.51 compared to $1.68 reported in the prior year.
With the casino operator planning to focus on the premium offering based business model, investors would be hoping the trend to continue in the latter half of the year.