We’ve gotten to inured to headlines that say such-and-such a quarter was “rescued by Macao” that I did a double-take today. The lead item on a newsletter was “Wynn Resorts Q2 results boosted by Las Vegas.” It’s 
nice that the Strip is something other than an afterthought, even if Steve Wynn greeted the news with apparent ingratitude. Atypical Las Vegas Strip levels of staying and dining (up 12.5% from Q213) helped propel earnings 57% upward. “I never had a $50 million in July [in Las Vegas] in my business career, 40 odd years in gaming,” said an apparently astonished Wynn. In spite of all this success, Wynn still managed to miss Wall Street‘s demanding revenue expectations, even if profit overshot analysts’ target. The culprit was a soft June in Macao, where World Cup betting fever sapped casino revenues. Even so, Wynn’s Macanese casinos managed a small quarterly increase of 3%.
The oldest part of Wynn Macau is currently seeing a $60 million renovation, to give the company refreshed product in the year before Wynn Palace opens in 2016. Even so, mass market revenues were up 43%. “We’re feeling up about Las Vegas. But we’re privileged to be part of the Macau scene,” Wynn remarked, lest there be any doubt about where his priorities lie.
Profits were $204 million, or $2/share, up from $1.28/share last year. Revenue was a respectable $1.3 billion but Wall Street wanted to see $1.4 billion. Comparing his RevPAR to Sheldon Adelson‘s, Wynn said, “We build houses of brick, and our houses of brick take a little longer to erect than some of the others.” Of course, anyone who has followed the career of Steve Wynn knows he sets great store by the fable of the Three Little Pigs.
* If International Game Technology wants to fend off rival bidders all it has to do is keep posting quarters like the one CEO Patti
Hart announced yesterday. Sale revenues of $167 million sound good until you learn it was a 36% decline — 29% below J.P. Morgan analyst Joseph Greff’s forecast. Systems sales were also down 12% year/year. IGT’s installed base of slots shrank by 2,900 as competitors Scientific Games and Bally Technologies made their presence felt. And yet profits were up. Hart attributed the 10% profit hike to “effective cost management [and] improved efficiencies in a challenging industry environment” (read: layoffs). Revenue-participation games also did their part, growing 12% and chipping in $218 million.
North American replacement activity was characterized as a “really low” 2,600 units. Replacement of 3,300 Canadian machines failed to manifest itself this year (unlike 2013). Overseas unit sales were about as expected (3,300 machines) but at a 33% markdown. Interactive gaming continued to be a bright spot, grossing $72 million and up 17%, “primarily driven by an increase in both daily active users and bookings per daily active user.” That DoubleDown Casino purchase won’t pay for itself overnight but it’s earning its keep. Just to make sure Wall Street got the point, IGT announced that social gaming had brought in $205 million in the last nine months.
