Wynn Resorts provided more evidence of a strong Macau casino comeback ahead as the company beat earnings and revenue estimates in the first quarter.

Casino operator Wynn (ticker: WYNN) joined Las Vegas Sands (LVS) in beating expectations off the back of the travel and tourism recovery in the region after restrictions were lifted in January.

The company also reinstated its dividend, announcing a quarterly dividend payout of 25 cents a share, which it said reflected the strength of its results.

The companys Macau operations generated operating revenue of $600.1 million in the first three months of the year, beating FactSet estimates of $588 million. Its Wynns highest quarterly Macau revenue figure since the fourth quarter of 2019, before the Covid-19 pandemic.

Wynns Macau property portfolio returned to profitability, posting adjusted Ebitda of $155.8 million, up from a $5.5 million loss the previous year, and at around 40% of 2019 levels.

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In Macau, after several challenging years, we were pleased to experience a meaningful return to visitation and demand, particularly in our mass gaming and retail businesses, said CEO Craig Billings.

He added that Wynn was well-positioned for success in Macaus next phase of growth.

The regions recovery is really only getting started. Las Vegas Sands noted that ferry capacity between Macau and Hong Kong had only reached 25% of 2019 levels by the end of March, while airport passenger volumes reached 39%.

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Wynn continued to perform well in Las Vegas, where it posted a record adjusted property Ebitda of $232 million. Billings said this was achieved despite the confluence of high inflation, high interest rates, bank failures, and increasingly difficult year-over-year comparables.

Hotel revenue was strong in Las Vegas as the average daily room rate reached a record $493, up 46% from the same period in 2019.

Jefferies analyst David Katz reiterated a Buy rating on the stock following the earnings release. The strength of the quarter is supportive of our positive view, most notably on Las Vegas and Macau, which should continue to accelerate through 2023, he said.

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Wynn reported total revenue of $1.42 billion in the first quarter, a 49% increase from the same period in 2022, and ahead of analysts expectations of $1.4 billion. Adjusted earnings of 29 cents a share beat estimates of 4 cents a share, according to FactSet data.

The stock, which has climbed 35% so far this year, pointed 0.7% higher in premarket trading Wednesday.

Write to Callum Keown at callum.keown@barrons.com

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Wynn Beats on Earnings and Revenue. Why a Macau Recovery Is Worth a Bet. - Barron's