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To: LindyBill who wrote (33862)	7/2/1999 12:14:00 AM
From: Ruffian	Respond to of 152472

Lindy, Did You Do This?> July 2, 1999 Mirage Says Bad Luck at the Tables Could Lower Earnings Significantly By CHRISTINA BINKLEY Staff Reporter of THE WALL STREET JOURNAL Mirage Resorts Inc. said it expects its second-quarter earnings to be less than half of market expectations, in part blaming a recent run of bad luck at its gambling tables and tougher-than-expected competition in Las Vegas. The Las Vegas casino operator predicted per-share earnings of seven cents to 10 cents a share for the quarter, compared with consensus expectations of 24 cents, according to First Call. The announcement, made after the market closed Thursday, comes after a string of good news at casino companies that has sent their stocks rising this year. Mirage said its earnings are being hurt by tough competition from two new casinos in Las Vegas, Mandalay Resort Group's Mandalay Bay and the privately held Venetian. It also blamed higher initial costs of opening two new properties, the Bellagio in Las Vegas and Beau Rivage in Biloxi, Miss., as well as an expensive room refurbishing at its Treasure Island casino in Las Vegas. The lower-than-expected house winnings at its gambling tables accounted for about six cents a share of the difference between expectations and the new estimate, Mirage Resorts' chief financial officer, Dan Lee said. Steve Wynn, Mirage Resorts' chairman and founder, participated in his first-ever conference call with about 60 Wall Street analysts and investors to discuss the earnings. Compounding the bad news, he said the company will no longer disclose certain information about its individual casinos, such as average daily rates for hotel rooms. He said that he doesn't want to provide such details to competitors and that "intelligent investors" don't need it. "When a company starts disclosing less, it usually means there's something to hide," said Jason Ader, an analyst with Bear Stearns. Investors have closely monitored Mirage's earnings since last fall when the company opened the $1.8 billion Bellagio. Because the property is attempting to lead the city into a higher level of Chanel and Armani-inspired luxury, critics have questioned whether the market can support the move. Likewise, Beau Rivage is an attempt to be the most luxurious casino in its Southern U.S. market. "We have been spending a bloody fortune in Mississippi in creating a destination resort," Mr. Wynn said, noting that the company has gone so far as to subsidize air fares to attract tourists to Beau Rivage. Companywide, occupancy rates for standard rooms at Mirage Resorts fell to 97% in the second quarter, compared with 99% a year ago, the company said. Companywide, average prices for standard rooms rose about 15%. Mr. Lee took the blame for the earnings surprise, saying, "By the time I realized how far off [the estimates] were, it was too far to just whisper to somebody." Then gamblers at Mirage properties experienced a run of good luck, lowering the company's "win percentage." "So it just kind of dug a hole," Mr. Lee said. Mr. Wynn insisted that the current bad news is temporary and that increases in tourism and better house luck at gambling tables will turn things around during the next year or so. "Let's make no doubt about it. We always overspend. The question is, did we overspend recklessly," Mr. Wynn said, adding later, "If I had it to do over, I'd do exactly the same thing." Mirage in May issued 16.6 million shares at $25 a share, far above Thursday's closing price of $16.75, before the profits warning. "It looks bad," said Mr. Ader. "There's an old saying, never, ever buy from a smart seller."