Key Takeaways From Wynn Resorts’ Q4

by Trefis Team
Wynn Resorts
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Wynn Resorts (NYSE: WYNN) reported strong earnings earlier this week, ending the year on a strong note. Wynn grew consistently over the year, beating estimates in each quarter. Net revenues for the fourth quarter grew to $1.69 billion (+30% year-on-year), while its EPS rose sharply from $1.12 in Q4’16 to $4.77 in Q4’17, primarily due to the income tax benefit from U.S. tax reform and increases from Wynn Palace, Wynn Macau, and Las Vegas operations. Below, we have summarized the major takeaways from Wynn’s Q4 earnings using our interactive dashboard.

Growth In Casino Business Propelled Margins

Casino revenue accounts for nearly 78% of Wynn’s revenue, and this revenue stream has seen consistent growth. Revenue from the casino business grew 37% y-o-y to $1.37 billion in Q4’17. Operating margins grew from 11% in Q4’16 to 18% in the current quarter. The improved margins were fueled by the growth in Wynn Palace and Wynn Macau operations, slightly dampened by Las Vegas operations.

Casino revenues from Wynn Macau recorded a 25% increase in Q4’17. The increase was attributable to a 45% increase in VIP turnover and an increase in mass market table game win percentage, which grew from 17.7% in Q4’16 to 18.4% in Q4’17. Wynn Palace’s casino revenues grew an impressive 74% in Q4, driven by  57% increase in VIP turnover and a 66% increase in mass market table games win percentage. Given the continued recovery of the casino industry in Macau, we expect that sustained growth in the VIP gambling market will likely boost both Wynn Macau and Wynn Palace.

Going Forward

The company is expected to start working on the first phase of its lagoon-themed park in Las Vegas in early 2018. Additionally, Wynn is also building the Boston Harbor resort which is expected to open in mid-2019. It also announced the opening of an additional retail space in the third quarter of 2018. These initiatives might have a short-term impact on the company’s bottom line. However, we expect a significant boost to the top line after they come into operation.

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