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Very solid quarter but it's all about expectations.  Conference call should be somewhat upbeat.

Wynn reported what we thought were pretty solid numbers and handily beat the street's EBITDA for Vegas and Macau.  The numbers were pretty much in-line with our expectations, absent some high hold in LV and low VIP hold in Macau.  It's clearly all about expectations, though, and the stock action this morning clearly indicates that investors had hoped for better.  This is somewhat surprising since the Macau number should've been easy to estimate within +/- 5% and Las Vegas wasn't a disaster.  That's what happens when you trade at north of 15.5x 2010 EBITDA.  No surprise that MGM is down on WYNN's price action since we're pretty sure people are expecting a big number when they print next Thursday.


3Q09 Details

WYNN reported revenues of $773MM and $198MM of property level EBITDA , beating our revenue number by $3.6MM and our EBITDA number by $1.2MM.  Wynn Las Vegas EBITDA was $6.5MM above our estimate while Wynn Macau was $5.4MM below our estimate.

Las Vegas net revenues were $324MM vs our number of $307MM, and EBITDA was $70MM, $6.5MM better than our estimate.

  • Table drop was 5% lower than our estimate, however, higher hold more than made up the difference.  While 23.7% hold is within WYNN's normal range of 21-24% and actually below 3Q08 hold, in only 2 of the last 7 quarters has Wynn reported hold above 21%.  We were assuming a lower normalized hold in the 21% range given the fact that customers are gambling less and for shorter periods, thereby decreasing the average hold rate to 19.7% over the last 6 quarters. Using a 21% hold rate,  we estimate that revenues would have been $14MM lower and EBITDA would have been $6.8MM lower than reported numbers.
  • Slot win was $2.7MM below our estimate due to weaker slot drop -- 1.6% worse than our estimate and slot hold was 20 bps lower than 3Q08.
  • Hotel revenues were in line, however, occupancy was 6% lower than our model while ADR was $15 per night better at $210
  • Other F&B, entertainment, retail and other non-gaming revenues were strong, coming in $9MM above our estimate

Wynn Macau results were below our estimates with revenue $14MM below our estimate and EBITDA $5.4MM below our estimate.

  • VIP gross table win was $14MM below our estimate due to lower hold of 2.8% vs our "normal" rate of 3%
    • The 20 bps point hold differential would have resulted in $28MM of higher revenues and $10MM of incremental EBITDA
  • Mass table revenues were in line with our numbers
    • Wynn removed some more Mass tables for the 6th consecutive quarter
  • Wynn's slot revenue was disappointing, but some of that may be attributed to disruption of the slot floor reconfiguration and removal of 100 slots in the quarter
  • The addition of a new high-limit gaming salon with 40 machines opened ahead of schedule and the opening of two new private gaming salons with 29 VIP tables is also opening one quarter ahead of schedule

Other details:

  • SG&A (net of corporate and stock comp) was $6MM higher than we modeled, while corporate was $5MM lower.  This was due, we suspect, to some reclassification of expenses related to the Wynn Macau IPO