Wynn Resorts undaunted, feels profits will rebound
By JOSH RESNEK
When the stock market closed Monday afternoon, officials of Wynn Resorts released the company’s first-quarter earnings report.
It wasn’t pretty.
But then, it wasn’t meant to be pretty.
For the fourth consecutive quarter, Wynn reported deplorable earnings, mainly the result of the COVID-19 pandemic, and the impossible business situation the casino and hotel world was thrown into and which it hasn’t yet come out of.
The resiliency of casino stocks is famous during hard times.
Investors and analysts know this: very few businesses can generate money and profits like casinos and their hotels when they are operating at full capacity.
Stock analysts and traders understood this and compensated for it.
Unbelievably, Wynn stock went up in anticipation of earnings being reported but ended down slightly at the end of the trading day. It closed Monday not too far away from its 52-week high of $143.88, proving that bad earnings don’t necessarily mean very much to investors trading on the NASDAQ exchange.
The earnings weren’t just bad. They were way off estimates. In fact, they weren’t earnings at all. They were losses and substantial losses to boot.
Wynn lost $280.98 million in Q1 versus losing $404.04 million during the same period last year.
At least the company’s losses shrank as the pandemic weakened and Las Vegas reopened as well as Encore in Everett and Macau, the corporate giant’s Chinese outpost. That location is Wynn’s most prized possession. It accounts for 75% of what Wynn takes in during a given year.
First-quarter earnings were $2.53 per share versus $3.77 per share last year during the same quarter.
In both instances, the losses and earnings were less than the first quarter last year, an improvement of sorts that shows the casino giant trending in the right direction.
Analysts according to Nasdaq had projected Q1 earnings at $1.98 per share. Analysts also predicted revenues of $725.78 million in Q1 versus $953.72 million in the same period last year. Wynn stock closed at $125.73 per share, down .56 cents a share.
Its market cap stood at $14.539 billion – that is – the total value of all its shares outstanding.
More than 2.2 million shares were traded Monday.
The relaxation of restrictions on the number of players allowed in Wynn’s casinos is expected to reverse the negative figures in the next twelve months.