Wynn Lifts Buyback Plan to $1B as Q3 Earnings Miss Estimates

Posted on: November 4, 2024, 06:46h. 

Last updated on: November 5, 2024, 09:31h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Shares of Wynn Resorts (NASDAQ: WYNN) dipped in Monday’s after-hours session despite the casino operator announcing it boosted its share repurchase program to $1 billion. Disappointing third-quarter results triggered the selloff.

Wynn Civic 50
Wynn Las Vegas. The operator’s third-quarter results missed estimates, but it’s boosting its buyback program. (Image: YouTube)

As of this writing, the gaming stock was down 3.45% in extended trading after reporting third-quarter non-GAAP earnings per share of 90 cents on revenue of $1.69 billion. Analysts expected earnings of $1.10 per share on sales of $1.73 billion. Macau, which is the company’s largest market, was the culprit behind the tepid results, as revenue and earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) at the Wynn Palace integrated resort slipped on a year-over-year basis.

The Wynn Macau casino hotel performed better during the July through September period, but strength there didn’t offset declines at its sister property.

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.

While the Chinese territory was a drag on Wynn’s third-quarter results, it could be a spark during the current quarter, with analysts noting October gross gaming revenue (GGR) there paced ahead of expectations — a development that could be true of the entire quarter.

Wynn is Part of Gaming Buyback Brigade

Throughout this year, a slew of gaming companies have announced plans to repurchase their shares. For its part, Las Vegas-based Wynn is boosting a previously existing buyback program in a significant fashion.

On November 1, Wynn’s board of directors approved the increase of a previous buyback effort to $1 billion. That program had $247.7 million in capacity remaining as of September 30 after Wynn spent $117.7 million buying back its 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,” said CEO Craig Billings in a statement.

Wynn joins rivals such as Caesars Entertainment (NASDAQ: CZR) and Las Vegas Sands (NYSE: LVS) in announcing fresh buyback efforts. The gaming company’s third-quarter buyback activity was well-timed as it occurred at an average price of $80.37 — well below Monday’s closing price of $95.65. Wynn concluded the September quarter with cash on hand of $1.34 billion and debt of $11.79 billion.

Las Vegas Also Weighed on Wynn Q3 Numbers

In prior quarters of slack Macau data, Wynn was able to offset some of that weakness with its Las Vegas operations, but that wasn’t the case in the July through September period.

During that span, Las Vegas revenue declined by $11.8 million to $607.2 million while adjusted property EBITDAR dropped to $202.7 million from $219.7 million a year earlier. Table games win percentage at the operator’s two Las Vegas properties was 23.3%, down from 26% during the same period last year.

That’s another sign that Strip operators are grappling with tough year-over-year comparisons — an issue that’s recently been highlighted by analysts.