By Kristin Jones
TAKING THE PULSE: Casinos have welcomed back gamblers in the
past year after a recessionary slump, but persistent unemployment
and languid wages have put pressure on that growth. Moody's
Investors Service in June noted that the winning streak in U.S.
gambling appeared to be slowing and even reversing. Declining
volumes on table games and slot machines sent Nevada's gambling
revenue down sharply in May from the previous year, the Nevada
Gaming Control Board reported.
At the same time, the spectacular growth of gambling in Macau
has been moderating in recent months, facing increasingly tough
year-over-year comparisons at the same time as China is poised for
a slowdown. The area's popularity with Chinese gamblers has been a
boon to U.S. casino operators with exposure to the market--and also
raised questions for operators like Las Vegas Sands Corp. (LVS) and
Wynn Resorts Ltd. (WYNN) about the murky political dealings behind
the high-stakes land deals. Last year, Macau earned more than five
times the gambling revenue of the Las Vegas Strip.
COMPANIES TO WATCH:
Wynn Resorts Ltd. (WYNN) -- reports July 17
Wall Street Expectations: Analysts see a per-share profit of
$1.51, with $1.34 billion in revenue. A year earlier, Wynn reported
a 97-cent per-share profit, or $1.60 excluding property charges and
other one-time items, on $1.37 billion in revenue.
Key Issues: Like its competitors, Wynn Resorts has seen a
bottom-line boost from operations in Macau, though its earnings
slipped earlier this year as it kept a smaller cut of revenue from
its table games on the Las Vegas Strip. In May, Wynn won land
rights for a multibillion-dollar casino resort in Macau, which its
chief executive called "the single most important project in the
history of Wynn Resorts."
Penn National Gaming Inc. (PENN) -- reports July 24
Wall Street Expectations: Analysts surveyed by Thomson Reuters
expect per-share earnings of 64 cents on revenue of $722 million. A
year earlier, the company reported per-share earnings of 71 cents,
or 55 cents excluding write-downs and other items, on revenue of
$687.9 million.
Key Issues: Penn National's revenue has posted double-digit
growth for three of the four most recent quarters as customers
return to the U.S. regional casino company's racetracks and
casinos. In late May, the company opened Hollywood Casino Toledo,
one of Ohio's first two casinos, about a month later than
originally anticipated. The opening was seen adding to expenses
during the quarter, but advisory firm Janney saw indications of a
strong start. Despite signs of growth, Penn remains vulnerable to
competition and cannibalization as new markets open to gambling and
current markets expand.
Caesars Entertainment Corp. (CZR) -- reports Aug. 1
Wall Street Expectations: Analysts see $2.29 billion in revenue.
A year earlier, the company posted revenue of $2.23 billion.
Key Issues: Caesars, a giant in the industry, hasn't recovered
fully from the recession and hasn't posted a profit since late
2009. Revenue generally has followed an upward trend in the past
year; the general return of customers to Las Vegas has helped,
dragging along less-successful operations in Atlantic City and
other spots. In May, its joint-venture casino with Rock Gaming LLC
opened a casino in Ohio. But Caesars lacks a casino license in
go-go Macau. And the company's heavy debt, and attendant interest
expenses, appear likely to keep weighing down earnings in the short
term. Looking ahead, Caesars has pushed for the legalization of
Internet gambling in the U.S., but the prospects for that remain
uncertain.
Las Vegas Sands Corp. (LVS) -- reporting date to be announced
Wall Street Expectations: Forecasts calls for a 61-cent
per-share profit on $2.83 billion in revenue. The company reported
a year-earlier profit of 45 cents a share, or 54 cents excluding
pre-opening costs and other impacts, as it generated $2.35 billion
in revenue.
Key Issues: Las Vegas Sands has seen blockbuster growth in
recent quarters, driven primarily by its Asia properties. The
company now has four casinos in the Chinese gambling enclave of
Macau; its newest, Sands Cotai Central, opened in April. J.P.
Morgan warned recently that the new property raises the risk of
cannibalization among Sands casinos in Macau, and pointed to signs
of slowing growth in the market. The casino also dropped its bid to
win rights to additional land there, giving up its previous
investment of $100 million and thwarting its further expansion
plans. The casino's Las Vegas revenue has also been growing, albeit
more modestly.
MGM Resorts International (MGM) -- reporting date to be announced
Wall Street Expectations: Analysts project a loss of 14 cents a
share on revenue of $2.35 billion. A year ago, the casino operator
reported a $6.22 per-share profit, including a special gain of
$6.27 a share, and net revenue of $1.81 billion.
Key Issues: MGM's properties on the Las Vegas Strip and its
operations in booming Macau have led to double-digit revenue growth
for the past year. It also has stemmed the bleeding from its
CityCenter joint venture in Las Vegas, delivering stronger revenue
in recent quarters. But the casino operator has reported just one
quarter in the black, of the past 12, as it struggles to pay down
heavy debt.
(The Thomson Reuters financial estimates and year-earlier
figures may not be comparable due to one-time items and other
adjustments.)
Write to Kristin Jones at kristin.jones@dowjones.com