Wynn Lifts Buyback Plan to $1B as Q3 Earnings Miss Estimates
Wynn Resorts' (NASDAQ: WYNN) shares fell during Monday's after-hours trading, even though the casino operator revealed an increase in its share buyback program to $1 billion. The selloff was prompted by disappointing results in the third quarter.
At the time of this writing, the gaming stock had fallen 3.45% in after-hours trading following the announcement of third-quarter non-GAAP earnings per share of 90 cents on revenue of $1.69 billion. Analysts predicted profits of $1.10 per share on revenue of $1.73 billion. Macau, the company's biggest market, was responsible for the weak results, as both revenue and earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) at the Wynn Palace integrated resort decreased compared to the previous year.
The Wynn Macau casino hotel showed improved performance from July to September, but this increase didn't compensate for losses at its sister location.
"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 negatively impacted by the Chinese territory, it may provide a boost in the current quarter, as analysts observed that October's gross gaming revenue (GGR) exceeded expectations — a trend that could apply to the entire quarter.
Wynn Joins Gaming Buyback Brigade
Over the course of this year, numerous gaming firms have revealed intentions to buy back their stocks. Las Vegas-based Wynn is significantly enhancing a previously established buyback program.
On November 1, Wynn's board of directors sanctioned the expansion of a prior buyback initiative to $1 billion. As of September 30, that program retained $247.7 million in capacity following Wynn's $117.7 million expenditure on stock buybacks 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 aligns with competitors like Caesars Entertainment (NASDAQ: CZR) and Las Vegas Sands (NYSE: LVS) in revealing new buyback initiatives. The gaming firm’s buyback initiatives in the third quarter were strategically timed, taking place at an average price of $80.37 — significantly lower than Monday’s closing price of $95.65. Wynn wrapped up the September quarter with $1.34 billion in cash and $11.79 billion in debt.
Las Vegas Also Affected Wynn's Q3 Figures
In earlier quarters of weak Macau data, Wynn managed to counter some of that decline with its Las Vegas operations, but this wasn’t true in the period from July to September.
Over that period, Las Vegas revenue fell by $11.8 million to reach $607.2 million, while adjusted property EBITDAR decreased from $219.7 million to $202.7 million compared to the previous year. The win percentage for table games at the operator's two properties in Las Vegas was 23.3%, a decrease from 26% in the same timeframe last year.
This is another indicator that Strip operators are facing challenging year-over-year comparisons — a concern that analysts have recently pointed out.
