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Playing roulette with WYNN earnings

October 19, 2011

Wynn reports Q3 earnings at 4PM EST today. As you may know, I do not hold a bullish view of this company. In short, expectations are too high and WYNN’s 4 resorts do not provide enough diversification to allow the company to gracefully weather economic downturns.

Consensus EPS expectation is $1.17. Macau revenues will be up, but that’s not a surprise after the September gaming report. On the other side of the Pacific, Vegas revenues will be stagnant. Don’t see much room for surprise to the upside here. As I’ve said, analyst expectations are too high.

“Past Earnings Performance: The company missed estimates last quarter after beating forecasts in the prior two. In the second quarter, the company reported net income of 97 cents per share versus a mean estimate of profit of 99 cents per share. In the first quarter, the company beat estimates by 65 cents.”

The conference call at 4:30PM wil likely discuss the potential new resort planned for Macau. In addition, Wynn will gloss over stagnant Vegas revenues, preferring to flaunt any and everything Macau related instead.

Unrelated to earnings, Macau announced today that it will keep the number of gambling tables unchanged through 2013. WYNN Macau is down about 4% today. Look for WYNN to be down today as well.

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