Wynn splits expectations

Wynn Resorts split Wall Street expectations for cash flow in Macao last quarter, as well as on the Las Vegas Strip. Analyst Carlo Santarelli of Deutsche Bank said Wynn’s Vegas room revenue “wasn’t great” and characterized management’s projections as “a tad aggressive.” As for the Macao, although Wynn did better than anticipated, Santarelli opined “it’s very difficult to believe Macau is bottoming with firm conviction … we believe WYNN is the most appropriate way to play the potential fundamental/sentiment shift we would anticipate accompanying the trend stability [in a best-case scenario]. Accordingly, while we do not believe we are out of the woods yet as it pertains to Macau, we continue to believe the longer term optionality in WYNN is compelling.”

Despite a significant drop in table play, Wynn held steady in most departments, even posting an increase in coin-in and slot win. Profit was significantly leaner, thanks to $38 million less net revenue at Wynncore and $134 million less at Wynn Macau. Wrote J.P. Morgan analyst Joseph Greff, “We were surprised to hear of a firm March 25, 2016 Cotai opening date, but wouldn’t be surprised to later learn of the opening date being pushed out given well-known challenges in Macau.”

Greff characterized trends in Macao as “less bad to stable,” enough to justify incremental growth in Wynn’s stock price. “We think the recent transit visa relaxation as well as what appears to us to be a softened government stance on a full-smoking ban … could signal the end of a nasty policy bear-cycle and, to some degree, imply that both Macau and Beijing governments see current demand levels as a baseline to keep social harmony and economic stability.” Significantly, VIP play exceeded Greff’s expectations. The cost of Wynn Cotai is pushing Steve Wynn toward the high-debt territory he normally abhors, with long-term red ink currently standing at $8.8 billion … and with billion-dollar Wynn Everett struggling to get off the launch pad.

* Vegas Seven has published its selection of the best shows on the Strip and, except for Zombie Burlesque, there’s nothing here that’s out of the mainstream. Only one Cirque du Soleil show (The Beatles’ Love — says a friend, “Even Jesus can’t get comps to Love“) makes the cut but, as much as I applaud the inclusion of Donny & Marie and Jersey Boys, I think Human Nature deserves inclusion more than sclerotic Menopause The Musical. The zeal and freshness of this Motown revue banishes any whiff of Memory Lane, and the performers’ joy is infectious. The fact that perfect Motown stylings are being done by five very white, very, very Australian lads only adds to the charm.

* Sic transit gloria mundi Dept.: Our research department, observing the deployment of a new gaming device at Planet Hollywood, writes “Once an international superstar and sex icon, Britney Spears is now reduced to being a penny slot machine.” Let the cheap jokes begin.

* The Plaza Hotel is classing up its act, instituting free early check-in as well as complimentary airport shuttle service to McCarran International Airport. It’s nice to see Plaza management not phoning it in for a change.