Two Way Hard Three | Las Vegas Casino & Design Blog

I'm trying something a little different this quarter - a single thread to cover all gaming companies reporting.

I will update this thread as other companies report.

Wynn Resorts - Net Income: $34.2 million Revenue: $773.1 million
* Wynn Las Vegas / Encore Las Vegas: ADR: $210 Occupancy: 83.9%
* Wynn Macau: ADR: $263 Occupancy: 89.2%

Boyd Gaming - Net Income: $6.3 million Revenue: $398.2 million
The Echelon project will remain mothballed for three to five years.

Harrah's Entertainment - Net Income: -$1.05 billion (loss) Revenue: $2.28 billion
Harrah's is privately held.

Las Vegas Sands - Net Income: -$123 million (loss) Revenue: $1.14 billion

MGM Mirage - Net Income: -$750.4 million (loss) Revenue: $1.533 billion LV Sun

Station Casinos - Net Income: -$455.4 million (loss) Revenue: $255.7 million. Station is privately held.


Read archived comments (20 so far)
October 27, 2009 9:47 AM Posted by Brian Fey

I was pretty surprised to see BYD pushing Echelon back 3-5 years. Figure another 2 to finish it. It will be 5-7 years before we see it complete. I'm sure that could change and be moved up, if economy allowed.

Nothing else really shocked me. I still think Wynn Resorts must have something big in mind, I have no idea why they are accumulating such a huge stash of cash. $3.1 Billion in free cash, should allow them to do just about anything they could imagine.

October 27, 2009 10:46 AM Posted by PB

Brian- I agree with you that Wynn has to have something big in mind keeping that much cash on hand. I thought for a while they were going to look into taking over Fontainebleau project after Steve toured the property a few months back.

October 27, 2009 11:52 AM Posted by SaratogaEd

Harrah's loss includes Impairment Charges of 875.8 Million.
Fancy way of creating a tax loss......

October 27, 2009 1:53 PM Posted by detroit1051

The transcript of the WYNN call is interesting, especially the Q&A about Fontainebleau, Cosmopolitan and Echelon.

October 27, 2009 5:39 PM Posted by NavinR

Wynn's results were pretty good, I thought, and Steve Wynn thought so, too--given that they expected 2009 to be a disaster. I wonder why the stock got crushed so badly--expectations too high?

Wynn was elusive about the $3b in cash and what he intends to do with it. If it were me I would pay down the $4.2b in debt (or pay a surprise cash dividend like he did in the old days!).

October 27, 2009 7:43 PM Posted by Brian Fey

Navin - I was just about to post the same thing. He even stated he thought Vegas would end up being flat or possibly up vs 2008, and same for Macau. I was very surprised the stock got hammered 11% today. He beat both on the top and bottom line, and by a pretty good margin. I guess traders are just cranky right now. I see LVS and MGM traded down equally as well. Pretty short sighted if you ask me.

October 27, 2009 8:26 PM Posted by Jinx

Motley fool has a nice write up on why the stock was crushed today based on the earnings report.

October 27, 2009 10:18 PM Posted by Bob

He even stated he thought Vegas would end up being flat or possibly up vs 2008, and same for Macau.

Well, it's important to recognize that he has Encore this year, while last year he did not. To claim victory by matching last year's performance when one has an additional new property this year is disingenuous at best.

October 28, 2009 4:16 AM Posted by Brian Fey

Yes Wynn added Encore, in a year the city has seen monthly double digit declines in both visitation and casino revenue. So being flat is the new up. :) I mean I do get your point. But given where we've been, its not too bad.

Looks like $65 Million is the budget for the Encore Beach Club. I guess the front wall of Switch, the west wall I believe it would be, the one closest to the Strip, will be removed, and converted to glass, to view the new area. This should give it a more open and inviting appearance, not unlike Botero and Sinatra.

October 28, 2009 12:27 PM Posted by mungroo

Two interesting comments by Steve Wynn (among many) in the Wynn Resorts Ltd. earnings call:

"... until we understand what is going on in this country, we will not be expanding anything here. Period. "

On Fountainbleau:

"It’s looming next to us. It’s fully erected as far as the structure goes. It’s clad in this blue glass. The podium part is unfinished and the walls aren’t on, it’s open to the environment. I’ve never been in it, I don’t know what stage the interiors are. "

Rumor had it that Wynn had toured F'bleau. Guess not.

October 28, 2009 2:36 PM Posted by mike_ch

Just my guess: The $3+ billion in cash is being held for the Cotai project.

October 28, 2009 3:01 PM Posted by parchedearth

USAir just announced a significant (almost 50%) reduction in LV flights. That's probably enough to fill a large 3000 room property.

With visitation down, but relatively high occupancy on the strip there must be some (local?) properties that are starving. Does anyone know which properties are being hit hardest; maybe off-strip non-gaming?

October 29, 2009 12:05 PM Posted by motoman

I understood it as USAir consolidating their hubs by, among others, reducing Vegas while keeping Phoenix, the two they inherited from America West. Vegas and Phoenix were at one time, over a decade ago, two lower-traffic hubs from which America West could offer lower-cost flights. Presumably Vegas no longer offers that advantage. (Ancient airline history, I know; just saying it's a bigger picture than merely traffic to Vegas.)

As for WYNN's cash stash, it's a lot like another favorite company run by another favorite Steve, Jobs. Apple has such a ridiculous pile that Tim Beyers of Motley Fool accuses "Apple is Cheating You" if you're an investor. Yet naysayers have come and, inevitably, gone. I see parallels with WYNN in this and other ways. Both Steves seem determined to not repeat errors of the past.

October 29, 2009 2:16 PM Posted by Brian Fey

Just a quick look at LVS numbers, they aren't great. However, they said some VERY positive things about the future convention business in LV for 2010. I can't listen to the call right now, but it must be very positive, because their stock went from down .50 after hours to over $1.00 up now. MGM, WYNN, and MPEL are also way up after hours now. Hopefully this is a turning point for Las Vegas.

November 5, 2009 10:44 AM Posted by John

Without the one-time impairment charge from CityCenter, the third quarter was just about break-even for MGM. No?

November 5, 2009 10:57 AM Posted by Hunter

Yeah, that charge sank the results.

November 5, 2009 3:19 PM Posted by parchedearth

I'm not an accountant so be gentle if my analysis is flawed, but it looks like MGM would have made a $415M quarterly operating profit (what they call Property EBITDA) w/o the CC charges. They currently have $12.5B in debt, which they have been refinancing at a hefty 11% interest rate. Hence, it does appear they are making more than enough to cover the interest payments on their debt. If the economy recovers and they can pay down the debt, MGM could be a cash machine.

Also, they spent $28M on capital improvements last quarter. That's not very much when spread over all their properties.

November 5, 2009 5:10 PM Posted by detroit1051

I may be easy, but I came away rather encouraged by MGM's conference call today. Bobby Baldwin said a new CityCenter website was launched today. The introduction is impressive, but the link to Aria is the same old, same old. I'm still intrigued by Vdara. It may be the star of CityCenter.

November 5, 2009 5:18 PM Posted by Brian Fey

I'm gonna listen to the MGM call tonight also. I got that same number, $400ish million. But that just can't be right. There is no way MGM could have made that kind of money, in this environment, not with the room rates what they are, so I assume we're missing something. If that was right, surly people are not stupid enough to let the stock stay in the single digits. I still think its just ridiculously cheap, I've put my money where my mouth is, and loaded up. We'll see in time how she does, but I do think MGM can return to their glory days, and be a cash cow once again, just give them some time. I think it might take 3-5 years to really get them back to their old performance levels.

On another note, it appears as if Ron Tutor, is getting involved with the FB disaster. Ron Tutor may even gather a group to finish the project. Stay tuned.

November 6, 2009 4:07 AM Posted by detroit1051

This was one of Murren's discussion points which encouraged me about MGM's future. He even used the example of utilizing The Mansion for convention business receptions. However, they do have to be careful not to dilute the image of each property/venue.