Wynn earnings forecast lowered for 2Q

According to Deutsche Bank Securities, the VIP gaming segment performance in Macau has lowered Wynn Resorts’ earnings forecast.

Macau.- Wynn Resorts is set to achieve earnings lower than expected during the second quarter as its VIP gaming segment performance was softer than originally forecasted, brokerage Deutsche Bank Securities said. However, firm analysts assured that there is still a “compelling medium- and longer-term story” in the company.

“Relative to consensus, our second-quarter property level forecast (US$522 million) is approximately 3 percent below Consensus Metrix consensus (US$537 million) as our Macau property-level estimate is approximately 4 percent below consensus,” Deustsche Bank Securities’ analysts Carlo Santarelli and Danny Valoy wrote in a note.

Furthermore, they announced “some VIP softness” to be seen in June due to Macau junkets sending their patrons to the World Cup in Russia, causing a “transitory impact” on the business. “Our view is predicated upon continued Macau share gains, higher end Macau market gross gaming revenue (GGR) strength in both the VIP and premium mass segments, strong positioning in Las Vegas where high end trends remain sound,” they added.

In addition, they said the third quarter should show much better results: “We would note that third quarter comparisons should benefit from easy comparisons stemming from the third quarter 2017 impact in Macau from Typhoon Hato (we estimated a US$10-12 million property EBITDA drag) and elevated corporate expense (relief effort donations).”