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[LOS ANGELES] Wynn Resorts, the casino company founded by Steve Wynn, posted first-quarter earnings that missed analysts' estimates after a sharp drop in betting in Macau. The company cut its dividend by two-thirds and the stock fell.
Profit excluding some items fell to 70 cents a share, the Las Vegas-based company said Tuesday in a statement. Analysts were projecting US$1.19, the average of 10 estimates compiled by Bloomberg. Revenue was US$1.09 billion, compared with the US$1.12 billion average of estimates.
Like its competitors, Wynn Resorts is trying to weather a steep drop in betting in Macau, where the company does about two-thirds of its business. A crackdown on corruption led by President Xi Jinping has prompted many wealthy Chinese to cut back on conspicuous consumption.
"The depression of the VIP market continues," Mr Wynn, the company's chairman and chief executive officer, said on a conference call with investors.
To conserve cash, Wynn Resorts cut its dividend to 50 cents a share, from the US$1.50 it paid in February. The payout was US$1.25 a year earlier.
On the call, Mr Wynn said it would be "foolish to issue dividends on borrowed money." Wynn Resorts fell 11 per cent to US$115.64 in extended trading after results were announced. The shares gained 1.3 per cent to US$130.48 at the close in New York and are down 12 per cent this year.
The company's revenue in Macau, the only place in China where casino gambling is legal, fell 38 per cent to US$705.4 million, according to the statement. Wynn Resorts has a second project under construction there. The US$4.1 billion property is scheduled to open in the first half of 2016.
"Uncertainty is the plaguing word of the day in Macau," Mr Wynn said. "I fear it may erupt into protests against the government if it isn't settled soon." Elaine Wynn, the ex-wife of Steve Wynn, was thwarted in her bid to stay on the board after failing to garner enough support from shareholders at the company's annual meeting last week.
She is seeking to gain control of her 9.4 per cent stake in the company after agreeing earlier to limits on her ability to sell stock.