Two Way Hard Three | Las Vegas Casino & Design Blog

May 7, 2007

Wynn Resorts Swings to Profit for Q12007

Posted by Hunter

Well, they finally got out of the red... Wynn Resorts announced Q1 2007 net income of $58.4 million, compared to a loss of $11.4 million for 2006. Adjusted net income was $72.6 million, on strong results from Wynn Macau and Wynn Las Vegas.

Revenue for the quarter was $635.3 million, up from $277.2 million from a year ago.

The conference call starts in 20 minutes and I will be updating based on anything from that call.

The press release covers all of the interesting details - I will break them down shortly.

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Read archived comments (30 so far)
May 7, 2007 1:28 PM Posted by Brian Fey

Nice, the stock is screaming in after hours trading! I'm waiting on the line now for the call.

May 7, 2007 1:49 PM Posted by marlymarr

Well it's about freaking time!

May 7, 2007 3:07 PM Posted by DLO

Finally!! Don't forget to ask your question Brian.... regarding whether Wynn considers all resort expenditures when determining comps & offers.

May 7, 2007 3:09 PM Posted by Brian Fey

Man, what I great call. This company's future looks fantastic. Revenue could double in the next few years. I can't wait to see Wynn speak in person tomorrow at the shareholders meeting. Leonard, did you want to come and meet me, I'll even buy you breakfast.

May 7, 2007 3:29 PM Posted by Brian Fey

DLO - Actually if I am lucky enough to get a question answered, I will not ask that one. I want to know if Wynn has indeed left room for one more theater (possibly headliner) in his Encore plans. Or if they skipped the 3rd theater idea, and used that space for other uses.

May 7, 2007 3:36 PM Posted by mike_ch

The Macau kick-in finally happened, I guess.

May 7, 2007 4:01 PM Posted by Mike E

In response to Leonard's comments in another post regarding Wynn Resorts going back to red with the opening of Venetian, MGM, et al...

Did The Mirage falter when Rio opened? Excalibur? MGM? No.

Lanni said he was happy to see WLV open because he knew it would increase business to his properties by bringing more people to Vegas. He was right. With the lack of brand loyalty in Macau, this can only be more true in that market.

Despite its overwhelming crowds, they've hardly scratched the surface of the billions in potential visitors Macau hopes to attract with these megaresorts.

MGM Grand, Venetian, and the rest are each another reason to visit Macau; they will only help Wynn's numbers.

May 7, 2007 4:57 PM Posted by detroit1051

Wynn Call:
Wynn Las Vegas has the highest win per table and per machine in Las Vegas despite little foot traffic on its part of the Strip and construction disruption as the neighboring Palazzo rises. People play and stay at Wynn because of the quality.

May 7, 2007 5:35 PM Posted by Leonard Stern

Brian: OMG, are you seriously kidding me? What a "great conference call" this was? Certainly you were not listening carefully to Wynn's complete diatribe, repeated over-and-over again where Steve kept trying to emphasize the fact that "it's not the size that matters" well over fifteen plus times during the call in an attempt to justify his outright FEAR of the future impact that CityCenter, Palazzo/Venetian + to a more limited impact, Echelon will have on [his] long term revenues in Vegas, big-time, once they are launched. "Quality over quantity", GMAFB. I am always dumbfounded when listening to Steve's "spin" whereby he keeps trying to justify his personal views of the future of the gaming industry, on HIS terms. The fact that he is "totally supportive" + could not welcome or be more pleased that his clearly more successful superior, + deep-pocketed direct competitors like Adelson + Kerkorian are "his neighbors" who also develop first-rate properties, which will in turn result in a boon for Wynn Resorts, is absolutely ludicrous! Wynn Macau is in a short-lived position for continuing profitability, particularly after MGM Grand Macau opens on the Peninsula (key clue here on MGM's revenue exceeding that of Wynn Macau, once again, the Ho family's, whether direct or indirect participatory connection in the project as 50% co-owner) is a slam dunk for MGM. Remember this is Macau for Christ's sake. Secondly, Steve's comments were typically mired in fallacies + untruths, + today's conference call is no exception. He stated that Mirage's first year earnings = profits that exceeded MGM Grand's first year Net Profit when it first opened in the early 1990's. With the exception of that stupid Theme Park, MGM Grand was profitable right out of the gate. The only "truthful" statement that Steve made today was the fact that MGM was able to take advantage of some really great executive talent, initially hired by Steve, like Bobby Baldwin who currently is chief of CityCenter. Do you honestly think that Steve would have allowed Baldwin to be able to provide Mirage Resorts, under Wynn's tenure as CEO, with autonomous control + decision making authority whereby taking advantage of Baldwin's obvious qualifications + skill as a top ranking executive? I think not. The constraints placed upon ALL of Wynn's executives are reduced to mere subservient positions. No one challenges Steve, not even his own brother! Kudos to MGM/MIRAGE, shortly after their acquisition of Steve's money-losing public company by quadrupling their top executives' compensation + having them sign a long term, non-compete agreement. After TWO YEARS, Wynn Resorts, Ltd. has finally reported its very first quarterly PROFIT since its inception, which is considered by Wall Street or otherwise known as failure at the top! Oh, one more point, Wynn keeps to referring to employee loyalty, now, I really don't find it necessary to even opine on this point in light of the current employee morale issues that currently plague WYNN at the present time. If Steve honestly believes he will be able to retain his best employees after this fiasco, he really is in desperate need of mental health intervention. Finally Brian, I would be pleased to take you up on your offer to buy me breakfast, as long as it IS NOT @ WLV! LOL

May 7, 2007 5:36 PM Posted by mike_ch

I agree that a rising tide will raise all boats in Macau.

WLV will continue to drag this company down a bit until the rest of the area is redeveloped though. At the moment it's like the gateway to the Strip's graveyard.

May 7, 2007 5:58 PM Posted by detroit1051

Steve's "chattiness" helped me visualize the golf course development. It will be refreshing if he is able to pull off a Central Park type effect with the hotels backing up to a park. That, plus bridges to both the LVCC and Sands Convention Center make this property ideal.
Say what you want about Steve. His ego has made his company unique, and I'm a believer that people like to stay and play at his property. It's a different experience than at an MGM or LVS casino/hotel.

May 7, 2007 7:15 PM Posted by Leonard Stern

detroit: Wynn will not, read, "NOT" be in ANY position to develop the D.I. golf course property with this FANTASY "Central Park" scheme until at least AFTER CityCenter, Echelon, Fontaineleau + possibly, even after MGM/MIRAGE announces their future plans for development of the newly acquired site across from the Sahara (inside information which I have recently been privy to, despite MGM/MIRAGE's P.R release emphasizing their reported desire to update, renovate + retain Circus will eventually evolve into another massive planned integrated proposed project taking advantage of all of that north Strip acreage which is now being referred to as "CityCenter North". I would be willing to bet my life on the fact that Wynn will not even attempt at ANY major redevelopmet of the D.I. golf course property, to the extent he has announced, until at least AFTER 2010, if not several years thereafter.

May 7, 2007 7:24 PM Posted by Brian Fey

Leonard, my plane lands at 7:40AM. I could probably meet you at Venetian which would be close to Wynn to make my life easier about 8:30. We could do Grand Lux. Hunter, please send my email address to Leonard. Leonard, please email me your cell number, and let me know if we are on for breakfast, and we can continue this conversation in person.

May 7, 2007 7:49 PM Posted by David F.

I knew that there was going to be "The World Awaits II" I just didn't know it would be so soon........

May 7, 2007 8:04 PM Posted by Tom M

Actually, Leonard, I don't think there was any fear of city center et al in SW during the phone call. In fact, I think he looks forward to the opening of these resorts as a measure of how his golf course development might work. If history holds, these new resorts will bring even more people to LV. Your assertion these resorts will impact SW assumes a constant or declining number of visitors and that has not been the case in the past 15 years or so(9/11 excepted for obvious reasons). Frankly, your constant diatribes against him lend little weight to you opinions. It is clear to me that you have an extreme personal bias against SW and that reduces your credibility which might otherwise be very high given your industry experience and connections. I suggest(without much hope for success) that you stop hating on SW in every post and revert back to commenting on design and architecture and filling us in on the good things going on in LV.

May 7, 2007 9:36 PM Posted by Leonard Stern

Tom M: In order to maintain a reasonable level of civility here, as we have all been doing for quite some time now, might I suggest that my so-called bias towards "SW" (Steve Wynn) are not limited to my own personal experiences with the man. I can assure you, that I am unfortunately now the elected default spokesperson for those who are afraid to express their hatred + opinions of this f*ck. Personally, I have nothing to fear in terms of reprisal from Steve, because there is nothing that [he] can do to bully me or legally personally threaten me with frivolous litigation, as he has done in the past. That is NOT the case for the hundreds upon hundreds of innocent employees + executives, as well as many other people who have contacted me over the past year who have all been screwed-over by "SW" as you refer to him as. When I eventualy lauch my new website WYNN-SUCKS.COM later this summer, I will publish anything + everything from anonymous contributors (with the EXCEPTION of any interstate transmission to injure, kidnap or any communication that amounts to a death threat against Wynn or any members of his family). I currently now have four major law firms (who do not have any conflict of interest with Wynn or any of hs businesses) on board. Suffice it to say, I have never been this lawyered up ever. These attorneys are offering their services on a pro-bono basis for one year. Consider my website to be the equivalent of the for Wynn-bashers. I'm sure that Steve will use his vast legal resources to attempt to try and obtain either a TRO or an immediate restraining order to try + shut down my website, won't happen! If you think the Hasselhoff video was disturbing, wait until you see some of the the stuff from 1990-1991 (during the Mirage first year of operation) that has been sent to me, already authenticated. Stay tuned...

May 7, 2007 9:48 PM Posted by John

Well, I have always felt that Steve not only had to, but should wait until the city can absorb all of the new inventory from CityCenter, Cosmo, Fontainebleau, Echelon, Palazzo, and his own Encore before he begins to develop the golf course.

If history is any example of what will come, Steve will, more or less, repeat the property construction timetable he had at Mirage. Consider WLV his Mirage, Encore his Treasure Island opening four years after the first property, and consider the Golf Course Redevelopment his Bellagio opening around eight to nine years after the very first property. Honestly, Leonard, you have to admit that the man does seem to have impeccable timing when it comes to the "unveiling" of his "delicious experiences."

May 8, 2007 5:05 AM Posted by detroit1051

Steve was quite clear in the Call that he will not start the golf course redevelopment until after CityCenter and Echelon Place are up and running (at least CityCenter). That is an advantage to him as he will be able to assess whether MGM's glass and concrete jungle is a stroke of genius or a huge mistake. If Steve can steadily enhance his properties profitably in Vegas and Mscau, when he is ready to hang it up in 20 years at age 85, he will be remembered as a visionary much more than the corporate suits.

Leonard, for what purpose, other than rage and hatred, will you launch your website? I urge you to reconsider.

May 8, 2007 6:39 AM Posted by Tom M

Leonard, when I read something like you just posted I can only feel sorry that you hate someone so much you would waste life energy in such a negative way. I consistently read your posts because it is clear that you have insight and experience in the business. All I am asking is that you focus on that instead of hating on Steve Wynn. Clearly, this is not possible for you. That is too bad. Good luck with your website, I am sure it will have no affect on my opinion of his resorts.

May 8, 2007 10:52 AM Posted by BillyInLasVegas

Wow, all this SW bashing!
Even tho' I don't agree with everything Steve does and work for a competing property (that SW built!) I still own a few shares of WYNN and I have to admit that he knows how to build a great property.

I've heard hundreds of stories about the man but lets face it, the man changed Las Vegas and he seems to be doing it again.

May 8, 2007 11:48 AM Posted by mike_ch

This quest to become the Lester Bangs of the casino industry will be entertaining to watch if nothing else.

And another discussion goes down the drain...

May 8, 2007 11:49 AM Posted by Leonard Stern

To be totally honest with you detroit, the "hatred + rage" that I personally harbor towards the man was the LEAST determining factor in deciding to move forward with my anti-Wynn website. I have been contacted by so many people who have literally had their careers ruined + deprived of their livelihoods simply because of the vindictive + vicious nature of Steve Wynn. These people have no public forum to (anonymously) be able to express the evil that this ego-centric, self-promoting so-called "icon + visionary" continues to perpetrate upon this industry on a purely self-serving basis. When the real truth comes out, I can assure you that Wynn's reputation as the "most powerful man in Nevada" as well as the supposedly being the most supportive of his "team staff member" will be dispelled once-and-for-all. By providing a public forum, within the First A

May 8, 2007 12:15 PM Posted by Leonard Stern

mike_ch; I would rather equate my status, or quest as you put it, closer to that of maybe a "Perez Hilton" as opposed to "Lester Bangs" by my exposing the underbelly of the gaming industry, with the biggest perpetrator of all, who still continues to operate unchecked, even today, that being Steve Wynn!

May 8, 2007 12:52 PM Posted by detroit1051

Mike_ch, the things I learn from you. That was great.
"...the Lester Bangs of the casino industry"

May 8, 2007 1:19 PM Posted by mike_ch

Well, if you want to be compared to be compared to a gossip columnist who often dyes his hair pink, then be my guest. I used Lester Bangs for my comparison for his cynicism and his ability to easily pop the egos of the subjects he criticized.

Also, because of the obvious connection to gonzo journalism. From Wikipedia:
"Gonzo journalism is a style of reporting that mixes fiction and factual journalism. It uses a highly subjective style that often includes the reporter as part of the story via a first person narrative and events can be exaggerated in order to emphasize the underlying message.
Gonzo journalism tends to favor style over accuracy and often uses personal experiences and emotions to provide context for the topic or event being covered. It disregards the 'polished' edited product favored by newspaper media and strives for the gritty factor. Use of quotes, sarcasm, humor, exaggeration, and even profanity is common. The use of Gonzo journalism portends that journalism can be truthful without striving for objectivity and is loosely equivalent to an editorial."

Yeah, sounds like at least half every LStern post I've seen here.

May 8, 2007 2:34 PM Posted by Leonard Stern

detroit, sorry I inadvertently happened to hit the wrong keystroke so I did not complete my original post. Nonetheless, mike_ch, once again you are grasping at straws + it is clear from your comment(s) that you are, once again, attempting to malign my integrity which only bolsters the fact that you have no clue whatsoever. I have personal knowledge of Steve Wynn's activities that date back to the early 1990's, all of which, including videos, will be published in its entirety on my website. Secondly, you guys can keep trying to attempt to attack or otherwise discredit me based on your ongoing feeble comments in order to make a mockery of my remarks through this 'filter' of complete bull shit i.e., "Gonzo Journaism", etc., etc., etc. Now mike_ch, based upon your dialogue, you have now earned the top spot on my permanent official Shit List, + detroit, give it up already! Hunter, if you cannot discern that this is, once again a "back door" attempt to attack me personally, then you need to better edit these posts more carefully. [snip] Hey mike_ch, do you get it or not - stop the personal + malicious attacks against me + Hunter you know damn well that [I] have complied by the new policy to the "T". I have made absolutely NO malicious comments, either directly or indirectly, towards anyone on this forum since you appropriately enacted this policy. If these two wish to revert back to the mud slinging of the past + the malicious name calling, so be it.

[Ed: I removed a few parts of this comment because I don't think that Mike meant anything negative with the Gonzo reference - personally, I love reading Gonzo authors like Thompson and others - I think their take is refreshing and certainly not an insult to be compared to them. That said, let's flip this back to the discussion of the company's results. Leonard is right - the personal attacks pretty much went away after the rules went up and I'm not interested in returning to that type of discussion. If this continues, I'm closing this thread so let's not have an further comment on this and just move on.]

May 8, 2007 2:58 PM Posted by detroit1051

I'm ready to move on. I'm hoping Brian Fey (and anyone else who attended) reports on today's WYNN meeting. Anything come up that wasn't on the Call yesterday?

May 8, 2007 3:23 PM Posted by mike_ch

Since I was targeted in the above post, can I say something and then return this to the normal discussion? Since I don't communicate with Leonard over email, I have no other method of talking to him. Hunter, if you think this is inappropriate, just go ahead and delete this comment:

Leonard, I wasn't trying to earn a spot in your hall of shame. But it is a fact that you have an opinion, yes? There's nothing wrong in pointing that out, I'd hope.

And you've used truths such as Wynn's heritage/last name, his eye disease, the people he's relied on for support like Perry Thomas, his father's history as a gambling addict, the Le Reve incident, one of his relatives run-in with the law, etc to support your opinion of him as a bad businessman, a poor designer, unfit to own art, etc. Plus there's the personal experiences you've shared about lawsuits, being thrown out of Wynn's office, etc. You've also cited all of this when supporting your opinion.

This is why I cited the passages about Gonzo journalism that I did, and I wasn't trying to be a jerk about it. You compared yourself to Perez Hilton, a man who calls himself "the queen of all media" and pries into the private lives of others, exposes their flaws, and profits from it. Personally, I thought my description was more complimentary to you than your own.

I didn't realize I was crossing any forbidden lines, because you seemed to be taking it much further than I did. If you took what I said as an attack, it was an accident. It was more of a backhanded compliment than an actual insult, and I didn't feel it was socially inappropriate in light of your tone.

Anyway, back to peace, love, understanding, and quarterly profits being discussed below.

May 8, 2007 9:04 PM Posted by BrianFey

Well, I am back. Unfortuntally, I have to say, I have nothing to report. This meeting was very uninformative. It almost seemed like Steve was either very tired or possibly not feeling well. He kept the speech rather short compared to last year, and cut questions off an hour into the meeting. Between yesterday's call and todays meeting, I think we can be sure Encore's rooms will be close to 900 sqft or so. The annual report clearly refers to the hotel as, all suite. Two other things of note.... A server at CCG, told me Encore would have about 8 places to eat. I hope he's right, but that figure sounds high to me. Also, there is some very strange things at Encore on the main floor, I don't know what to think of it. I'll have to look at my pics and zoom in, to see what these are. I don't know if they are part of the "feature-hook" or what. Maybe its just a watering system for the gardens, but I've never seen anything like it. I did get pics, and will post the link in a few days. Lastly, no wonder these meetings wear Steve out, cause they wear me out! People always ask stupid questions, and this year, two questions were the same, both asking if they could get a discount on rooms for being a stockholder. Mr. Wynn was polite and just answered the question twice. Some other lady, thought we would be getting that $6 Div, each year! People really amaze me!!! Then some other genius, ask if we were selling a subconcession to Richard Branson. NO MORON, we only had one, and we sold it for $900 Million to Melco! You should have to take a test or something before you're aloud to enter, or at least before you can ask questions! :)

Leonard, you missed out on a free meal! Even though I was right on my bet, Wynn did do more revenue than LVS this quarter. (Wynn will beat LVS next quarter also) But I was feeling giving and going to buy you a meal anyway. What can I say, your loss!

Good Night all, its been a VERY LONG DAY.

May 9, 2007 5:41 PM Posted by Leonard Stern

Brian: I really would have been totally open to the opportunity to meet you in person + hook-up with you on your brief stay here in Vegas, had you been able to meet me at ANY other time or resort other than breakfast @ The Wynn. Regarding our so-called "bet" I, as well as Wall Street, consider "revenue" earnings as opposed to "net profit" as being the true indicator of a public company's performance. That being said, regardless of Las Vegas Sands' Q1 2007 decrease in overall "revenue" which was clearly influenced as a result of costs related to the construction of more than almost $5B+ in concurrent building costs related to the launching of multi-billion dollar projects. i.e. Palazzo, Venetian Macau + Singapore. Venetian Macau will absolutely DWARF both Wynn + even MGM Grand's Macau "peninsula location" properties by leaps + bounds. Steve's lousy 52 acre concession on the Cotai Strip will become reality, way after-the-fact, since WYNN is NOT included in, or will [he] be able to squarely compete with Adelson's $12B+ plan for the Cotai Strip, which by the way, is moving forward with confirmed contracts of some of the most preeminent hospitality operatores in the entire world. Listen, Brian, next time that you come to Vegas, I would be really pleased to personally buy you lunch, at my expense, at ANY place of your choice on the Strip, the ONLY exception being any eatery @ WLV. And there shall be no need for a "bet" to be connected with my offer. You have my e-mail address, just let me know, I would welcome you as my guest.