Wynn Resorts (WYNN) shares surged Friday as investors looked past the casino operator's earnings miss and focused on the strong start for the new Wynn Palace casino in Macau.
Adjusted earnings per share tumbled 51% to 50 cents a share, Wynn reported late Thursday, far below views for 85 cents. Revenue surged 37% to $1.3 billion, slightly above forecasts.
The Wynn Palace, which opened in August, accounted for $418.7 million in revenue, including $373.2 million from gaming. That appears to have cannibalized some sales at Wynn's other Macau properties, while Las Vegas revenue also dipped.
Still, the $4.4 billion Palace is "ramping up faster than we thought," Nomura said in a note Friday, one of many analysts with positive comments on Wynn. Palace is doing well with VIP and mass-market gamblers.
IBD'S TAKE: Wynn Resorts and Las Vegas Sands both get more than half of their revenue from Macau, China's lone gambling enclave. Apple, Boeing and GM are among other U.S. global giants exposed to a potential China-Trump trade war.
Meanwhile, the Chinese New Year holiday kicked off Friday with Wynn and other Macau casino operators hotel rooms nearly fully booked.
Wynn Resorts shares surged 8.8% to 103.88 in afternoon trade on the stock market today. That's a two-month high as the stock builds the right side of a base with a potential buy point of 109.60. Wynn fell about 1% Thursday in the wake of Wednesday night's results from Las Vegas Sands (LVS).
Las Vegas Sands reported flat EPS of 62 cents vs. views for 66 cents. Revenue climbed about 7% to $8.75 billion, also slightly below forecasts. Sands, which opened its Parisian Macau last September, tumbled 7.5% on Thursday, closing just below its 200-day line. But shares rose 2.2% Friday intraday.
Among other Macau-heavy stocks, MGM Resorts (MGM) gained 1% Friday intraday after dipped 0.4% on Thursday. MGM, which will open its own new Macau casino later this year, is working on a flat base with a potential buy point of 30.72. MGM recently found support at its 50-day.
Melco Crown Entertainment (MPEL), rallied 1% after Thursday's 2.9% retreat. Melco Crown is in a cup base with a potential buy point of 18.61.