WYNN: ANOTHER BIGGIE

Best operator in the top performing market in the world – you bet it will be another beat.

We expect Steve Wynn will be grinning from ear to ear next Monday when WYNN presents its Q2 results.  Q1 was a stand-out quarter as EBITDA and EPS came in 28% and 89% above consensus.  We think Q2 will be another big beat, particularly on EPS—we’re at $1.30, 34% above the Street.  We’re also 12% higher on Adjusted EBITDA and 7% higher on net revenues.

While we remain confident in our Wynn Macau estimates, Las Vegas, as always, is a bit of a wild card.  Our Q2 Wynn LV estimate is above the Street, owing to a very strong May on the Strip and Wynn’s recent outperformance.

Macau surprised everyone again in Q2 as market revenues rose 46% YoY and even 13% sequentially.  WYNN will be the 1st gaming operator in Macau to report Q2 earnings but, despite the upside, may not even have the best quarter of the bunch.  We think top Q2 honors will go to MPEL.  However, a big WYNN beat on July 18th should sustain the positive momentum for the group.

Here are the details:

WYNN Macau

We project Q2 Wynn Macau net revenue of $985MM and EBITDA of $310MM, 6% and 8% ahead of Street, respectively

• We estimate net gaming revenues will be $929MM or 38% YoY growth
  • VIP net win of $669MM
    • Assuming direct play of 10%, Rolling Chip of $33.4BN and hold of 2.9%
    • Rebate rate of 86bps
• Mass table win of $191MM
  • Table volume of $789MM and hold of 24%
• Slot win of $74MM
  • Handle of $1.43BN and win % of 5.2%
• Non-gaming revenue, net of promotional expenses of $56MM
• Variable expenses of $555MM ($474MM of gaming taxes and $75MM of incremental junket commissions above the rebate)
• $25MM of recorded expenses for non-gaming revenues
• Fixed expenses of $94MM

WYNN Las Vegas

We estimate that Wynn Las Vegas will report $355MM of net revenues and $94MM of EBITDA, 4% and 10% above the Street, respectively.

• We estimate net casino revenues of $134MM, representing 14% YoY growth
  • Table win of $118MM, up 21% YoY: table drop of $534MM and 22% hold
  • Slot win of $42MM, up 3% YoY: slot volume of $699MM and 6% hold
  • Discounts and other as a % of Gross Casino Win: 16%
• $266MM of non casino revenue and $44MM of promotional expenses
• $49MM of SG&A and $4MM of doubtful accounts

Other stuff:

• Corporate expense: $19MM
• D&A: $101MM
• Stock comp: $8MM
• Net interest expense: $58MM