By Douglas McIntyre

Wynn Resorts Ltd. (WYNN) was having a hard time deciding which way it wanted to go after earnings this morning.  The high-end casino resort operator exceeded earnings estimates by coming in at 28 cents net earnings per share on $773.1 million in revenues.  Thomson Reuters had earnings estimates at 15 cents per share on $743.05 million in revenues.  The notion that is hurting WYNN here despite the beat, is that at some point, valuation and an exponential stock gain from the lows has to be factored in.

Steve Wynn has his own worries, but this really highlights how volatile casino stocks like WYNN and the Las Vegas Sands Corp. (LVS) can be.  What happens today with Wynn will be important for Las Vegas Sands, as LVS posts earnings later this week.

Wynn is a more solid company than LVS, despite its leverage.  The ultra-high-end casino resort ended the quarter with about $1.3 billion in cash and equivalents and has total debt outstanding of $4.2 billion. It has also completed its initial public offering for its Macau assets.

  More Earnings News – Oil Stock Earnings Previews

Las Vegas Sands will reports its September 30, 2009-end quarter on Thursday, October 29.  While Wynn has now reported profits for two consecutive quarters (after a surprise profit for the June quarter), Las Vegas Sands is losing money and now needs to raise more cash.  Las Vegas Sands has lost money in each of the last four quarters and Thomson Reuters is calling for a small loss in the September and December quarters.  Reuters was only one of several reports last week calling the Las Vegas Sands $2 billion financing a risk to its planned Hong Kong IPO of its Macau operations in a copy-cat IPO.

Las Vegas Sands is a larger company.  The company’s cash balance at the end of June, which may be very different as of September 30, was $2.77 billion, while its long-term debt was $10.63 billion, and total liabilities were listed as $13.16 billion.  With analysts calling for $1.17 billion in revenues, Las Vegas Sands is roughly 50% larger than Wynn on the revenue side.

The pre-earnings share appreciation is almost numbing. If you measure yesterday’s closing price to June 30, 2009 to get a one-quarter picture, Wynn stock had risen 78%, and Las Vegas Sands had risen 104%.  And from the 52-week lows, the gains were roughly 300% at Wynn and were effectively over 1,000% at Las Vegas Sands.  The reason for the huge discrepancy there is that that Las Vegas Sands was an at-risk entity that was even briefly issued a going concern before it raised capital.

Las Vegas Sands probably needs to surprise Main Street and Wall Street.  A profit report out of the blue would be a very welcome surprise and might re-invigorate investors and traders alike.  Another positive would be an affirmation that its Hong Kong IPO is on track without concerns.  It used to be a $100 stock in late-2007.  That was then.

Related Articles:

• Oil Stock Earnings Previews
• 5 China Stocks for Smart Investors
• What are Twitter and Facebook Really Worth?