Wynn Resorts, Limited (NASDAQ:WYNN) delivered strong results on Tuesday beating on the bottom line, but missing on the top. Personally, I love what I see at the top and bottom lines for WYNN stock.
The Macau nightmare appears to have come to an end, and it seems to me that the company is back on track. With Elaine Wynn also restructuring the board of directors, the goal appears to be wiping WYNN stock clean of any vestiges of her ex-husband’s sexual misconduct allegations.
Overall operating revenues for WYNN stock rose more than 20% to $1.72 billion. That came on the back of a 25% increase in casino revenues to $1.24 billion. Backing out the massive $464 million litigation settlement for the quarter, operating income came in at $382 million, up more than 50% from last year’s $250 million. Net income before income taxes came in at $225 million, up substantially from last year’s $135 million.
All in all, these numbers look pretty darn good to me. However, we want to drill down to make sure not missing anything.
Highrollers Are Back
On the WYNN stock hotel level, even though occupancy decline 160 basis points 83.9%, the Las Vegas operations maintain strong pricing power with the average daily rate rising from $316-$340, and RevPAR increasing from $271 to $285.
The numbers from Wynn Macau are very encouraging, with revenues up 12%, and a 16% increase in adjusted property EBITDA. Casino revenues increased 10.5%. The table games turnover in VIP operations increased 29% to $17 billion. At last, the highrollers have returned. Indeed, room revenue saw a 19% increase, average daily rate increased 18%, and rev par increased 21.5%.
The numbers are even more blockbuster over in Cotai at the Wynn Palace. Operating revenues were up 47%, adjusted property EBIT exploded up 89%, casino revenues increased 51%, table game VIP turnover increased 39%, room revenues increased 38% ADR was up 31% and RevPAR was up 32%.
Big Changes Rather Than Fallout
This is all fantastic news.
Elaine Wynn obviously knew these numbers were great, and has been actively bringing changes to company leadership since Steve Wynn’s ouster. It is a very astute move to make, as it should improve optics regarding visitors feelings towards Wynn resorts and WYNN stock. Her ex is gone and he is sold all his shares in the company.
Elaine Wynn added three women to the board of directors. Betsy Atkins is particularly notable, as she has been in business for more than 35 years, primarily on the technology side. Wendy Webb is the CEO Kestrel Advisors, a management consulting firm, and was an executive at Walt Disney Co (NYSE: DIS) for 20 years.
Then there is former Clinton White House spokesperson Dee Dee Myers, who obviously was chosen for her public relations experience. In addition, Elaine Wynn is trying to remove another board member who is perceived to have ties that are uncomfortably close to Steve Wynn.
Bottom Line for WYNN Stock
I think the goal here is for Elaine Wynn to either position the company for future success with her remaining the largest WYNN stock holder, while also exploring the possibility of a merger or sale to another entity.
Regardless, all of the steps she’s taken were smart ones, and the most recent set of results indicate that business is finally blooming again at Wynn Resorts. I believe that WYNN stock is headed higher and there is much as 25 points of upside in the event of a sale.
Lawrence Meyers is the CEO of PDL Capital, a specialty lender focusing on consumer finance and is the Manager of The Liberty Portfolio at www.thelibertyportfolio.com. He owns shares of, and calls, on WYNN. He has 23 years’ experience in the stock market, and has written more than 2,000 articles on investing. Lawrence Meyers can be reached at TheLibertyPortfolio@gmail.com.
