Wynn Lifts Buyback Plan to $1B as Q3 Earnings Miss Estimates
- 04 Nov 2024
- Gambling News
Wynn Resorts (NASDAQ: WYNN) saw its shares decline in the after-hours trading on Monday, even after the casino operator revealed it has increased its share buyback program to $1 billion. The selloff was sparked by disappointing results for the third quarter.
At the time of this report, the gaming stock had decreased by 3.45% in after-hours trading following the announcement of third-quarter non-GAAP earnings per share of 90 cents on revenues of $1.69 billion. Analysts forecasted earnings of $1.10 per share with sales totaling $1.73 billion. Macau, the company's biggest market, was responsible for the lackluster results, with revenue and earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) at the Wynn Palace integrated resort declining compared to the previous year.
The Wynn Macau casino hotel showed improved performance from July to September; however, this strength did not compensate for losses at its sister establishment.
"Operating revenues from Wynn Macau were $352.0 million for the third quarter of 2024, an increase of $56.9 million from $295.0 million for the third quarter of 2023. Adjusted Property EBITDAR from Wynn Macau was $100.6 million for the third quarter of 2024, compared to $77.9 million for the third quarter of 2023,” according to the operator.
Although Wynn's third-quarter results were impacted by the Chinese territory, it might act as a catalyst in the ongoing quarter, as analysts observed that October's gross gaming revenue (GGR) in that region exceeded expectations — a trend that may persist throughout the entire quarter.
Wynn Joins Gaming Buyback Team
Over the course of this year, numerous gaming firms have revealed intentions to buy back their shares. Wynn, located in Las Vegas, is significantly enhancing an already established buyback program.
On November 1, the board of directors at Wynn sanctioned an elevation of an earlier buyback initiative to $1 billion. As of September 30, that program had $247.7 million left in capacity after Wynn used $117.7 million to repurchase its stock in the third quarter.
“We are excited about the outlook for the company, and we will continue to focus on driving long-term returns for shareholders,” said CEO Craig Billings in a statement.
Wynn teams up with competitors like Caesars Entertainment (NASDAQ: CZR) and Las Vegas Sands (NYSE: LVS) in revealing new buyback initiatives. The gaming firm's buyback activity in the third quarter was strategically timed, as it took place at an average price of $80.37 — significantly lower than Monday’s closing price of $95.65. Wynn finished the September quarter with $1.34 billion in cash and $11.79 billion in debt.
Las Vegas Also Impacted Wynn's Q3 Figures
In earlier quarters of weak Macau data, Wynn managed to compensate for some of that decline with its Las Vegas business, but that was not true in the July to September timeframe.
Over that period, Las Vegas revenue fell by $11.8 million to $607.2 million as adjusted property EBITDAR decreased to $202.7 million from $219.7 million the previous year. The win percentage for table games at the operator's two Las Vegas locations was 23.3%, a decrease from 26% in the same timeframe last year.
That’s yet another indication that Strip operators are facing challenging year-over-year comparisons — a problem that analysts have recently emphasized.
