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UPDATE 2-Wynn Resorts profit rises, shares fall

Published: 27 Oct 2009 07:19:40 PST

* Q3 adj EPS 33 cents vs. estimate 15 cents

* Q3 revenue edges up

* Shares fall 9 percent (Adds analyst comments, share price, byline)

LOS ANGELES, Oct 27 - Casino operator Wynn Resorts Ltd posted better-than-expected quarterly earnings on Tuesday, but results for its Macau resort disappointed investors and its shares fell 9 percent.

"The beat was encouraging, but EBITDA (earnings before interest, taxes, depreciation and amortization) was pretty much as expected," said Sanford Bernstein analyst Janet Brashear.

Wynn, which earlier this month raised about $1.8 billion via a Hong Kong listing of shares in its Wynn Macau Ltd unit, reported net income of $34.2 million, or 28 cents per diluted share, compared with $51.2 million, or 49 cents per share, a year earlier.

"Macau EBITDA only exceeded expectations by 2 percent," Stifel Nicolaus analyst Steven Wieczynski said in a research note. "Shares are reacting negatively as we believe investors expected more upside out of Macau."

Adjusted for property charges and other items, the Las Vegas-based company posted a profit of 33 cents per share, which beat the average analyst estimate of 15 cents a share, according to Thomson Reuters I/B/E/S.

"The numbers clearly beat our expectations," Susquehanna Financial analyst Robert LaFleur said. "The results were fairly respectable given the difficult operating environment."

Wynn's net revenue inched up to $773.1 million from $769.2 million, aided by higher revenue from hotel and food tied to Encore, Wynn's second Las Vegas resort that opened last December. Analysts had expected $743 million.

Wynn, run by casino mogul Steve Wynn, operates two casino-resorts in Las Vegas and one in Macau, the only place in China where gambling is legal. The company's second Macau resort, Encore Macau, is scheduled to open April 1.

Goldman Sachs analyst Steven Kent said upside for Wynn's shares could remain limited near term until investors gain clarity on the trend of Macau visa restrictions. Chinese officials have eased restrictions put in place last year, but there have been recent reports of a tightening of visa frequency.

Wynn's shares were down $5.70, or about 9 percent, at $57.41 in morning trading on Nasdaq.