Shares of Wynn Resorts (NASDAQ: WYNN) took a hit in Monday’s after-hours session despite the casino operator’s announcement of an enhanced share repurchase program worth $1 billion. The selloff was triggered by disappointing third-quarter results.
At this writing, Wynn’s stock was down 3.45% in extended trading after the company reported non-GAAP earnings per share of 90 cents on revenue of $1.69 billion for the third quarter. Analysts had anticipated earnings of $1.10 per share on sales of $1.73 billion. The performance in Macau, Wynn’s largest market, was a key factor behind the lackluster results. Revenue and earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) at the Wynn Palace integrated resort declined on a year-over-year basis.
Wynn Macau casino hotel showed improved results during the July to September period, but this performance was not strong enough to compensate for the declines at its sister property. Operating revenues from Wynn Macau amounted to $352 million for the third quarter of 2024, a rise of $56.9 million from $295 million in the same period of 2023. Adjusted Property EBITDAR for Wynn Macau was $100.6 million for the third quarter of 2024, compared to $77.9 million in the third quarter of 2023.
While the Chinese territory underperformed in the third quarter, it could become a growth driver in the current quarter, with analysts highlighting that October’s gross gaming revenue (GGR) in Macau exceeded expectations, potentially signaling a strong overall performance for the quarter.
This year, several gaming companies have announced share repurchase programs. Wynn Resorts, based in Las Vegas, significantly boosted its existing buyback initiative. On Nov. 1, Wynn’s board approved the increase of the buyback program to $1 billion. As of Sept. 30, the previous buyback plan had $247.7 million in capacity remaining after Wynn repurchased $117.7 million of its own stock during 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,” stated CEO Craig Billings.
Wynn joins competitors like Caesars Entertainment (NASDAQ: CZR) and Las Vegas Sands (NYSE: LVS) in unveiling new buyback programs. The third-quarter buyback activity for Wynn was well-timed, occurring at an average price of $80.37, below the recent closing price of $95.65. By the end of September, Wynn had $1.34 billion in cash on hand and $11.79 billion in debt.
Wynn’s third-quarter performance was also impacted by its Las Vegas operations. Historically, Wynn has managed to balance out weak Macau results with strong performances in Las Vegas, but this was not the case from July through September.
During this period, revenue in Las Vegas declined by $11.8 million to $607.2 million, while adjusted property EBITDAR fell to $202.7 million from $219.7 million the previous year. The table games win percentage across Wynn’s two Las Vegas properties dropped to 23.3%, down from 26% during the same period last year.
This decline is indicative of the challenges Strip operators face with tough year-over-year comparisons, a point recently emphasized by analysts.
