Wynn Resorts (WYNN) is up 5% premarket after the company reported better than expected first quarter results. Adjusted EBITDA rose 42% to $427.5 million as net revenue rose 48% to $1.48 billion.
The Macau gaming market continues to improve, led by a recovery in the VIP segment, where Wynn thrives. Strong results are not a surprise as gross gaming revenue (GGR) in Macau grew 13% in the first quarter. Wynn grew market share by ~1%.
On the call, Steve Wynn said that there is a resurgence at the high end of the Chinese market. The correction in the luxury market that followed the elimination of corruption in Macau is over and the cycle is coming back. Also, the growth is healthy and not driven by credit extension. He noted that demand for Macau in China is enormous and there won't be more supply coming to the market after SJM and MGM's new properties. Importantly, Mr. Wynn does not foresee any more government interference in the market. Overall, management is cautiously optimistic about the VIP segment going forward and the early indications are positive.
Mr. Wynn was also upbeat on the prospects in Las Vegas, where the company plans to build a Paradise Park lagoon and beachfront with additional plans to be determined. He was elated that the Raiders are moving to Sin City. He said that Las Vegas will remain a top destination tourist city.
The company's resort/casino just outside of Boston will open in ~2 years.
Peers Las Vegas Sands (LVS) will report this afternoon while MGM (MGM) will report tomorrow morning.
Note that April Macau GGR will likely be released on May 1.