Wynn Resorts (NASDAQ: WYNN) shares fell in Monday’s after-hours session, despite the casino operator’s announcement that it had increased its share repurchase program to $1 billion. Disappointing third-quarter earnings spurred the selloff.
As of this writing, the gaming stock was down 3.45% in extended trade after posting third-quarter non-GAAP earnings per share of 90 cents on revenue of $1.69 billion. Analysts anticipated earnings of $1.10 per share on sales of $1.73 billion. Macau, the company’s largest market, was to blame for the disappointing results, as revenue and profits before interest, taxes, depreciation, amortization, restructuring or rent expenses (EBITDAR) at the Wynn Palace integrated resort fell year on year.
The Wynn Macau casino hotel performed better from July to September, but this didn’t overcome reductions at its sister resort.
Wynn Macau’s operating revenues for the third quarter of 2024 were $352.0 million, up $56.9 million from $295.0 million in the third quarter of 2023. Wynn Macau’s Adjusted Property EBITDAR for the third quarter of 2024 was $100.6 million, up from $77.9 million in the third quarter of 2023, according to the operator.
While the Chinese territory was a drag on Wynn’s third-quarter earnings, experts believe it will be a boost in the current quarter, with October gross gaming revenue (GGR) above estimates, which could be true for the entire quarter.
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- October GGR was US$2.6 billion, the highest since January 2020, Macau
- Sweepstakes increase gambling risks among young people, according to experts.
Wynn Is Part of the Gaming Buyback Brigade.
This year has seen a number of gaming companies announce plans to repurchase their own shares. Wynn Resorts, based in Las Vegas, is significantly expanding its existing buyback program.
On November 1, Wynn’s board of directors approved an increase in the prior buyback effort to $1 billion. As of September 30, that program has $247.7 million in capacity remaining after Wynn spent $117.7 million on stock repurchases in the third quarter.
“We are optimistic about the company’s prospects, and we will continue to focus on delivering long-term returns for shareholders,” CEO Craig Billings said in a statement.
Wynn follows rivals Caesars Entertainment (NASDAQ: CZR) and Las Vegas Sands (NYSE: LVS) in unveiling new buyback plans. The gaming company’s third-quarter buyback activity was well-timed, occurring at an average price of $80.37 — far lower than today’s closing price of $95.65. Wynn ended the September quarter with $1.34 billion in cash on hand and $11.79 billion in debt.
Las Vegas also weighed on Wynn’s Q3 numbers.
In previous quarters of sluggish Macau data, Wynn was able to offset some of the deficit with its Las Vegas business, but this was not the case in July through September.
During that time, Las Vegas revenue fell by $11.8 million to $607.2 million, while adjusted property EBITDAR fell to $202.7 million from $219.7 million the year before. The operator’s two Las Vegas locations had a table games win percentage of 23.3%, down from 26% the same period last year.
That’s another indicator that Strip operators are dealing with difficult year-over-year comparisons, which analysts have previously highlighted.
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