Deutsche Bank has cut its earnings forecasts for casinos operator Crown Resorts in fiscal 2015, citing disappointing revenue and earnings from operations in Macau.
The Macau gaming market has been experiencing weak trading conditions.
Crown Resorts has a stake of around 34 per cent in Melco Crown, a joint-venture that operates the City of Dreams casino resort, Altira hotel and Mocha Clubs in Macau.
Melco Crown is also developing the Studio City casino resort in Macau.
"We have reduced our earnings forecasts by five to six per cent to reflect lower earnings from Melco Crown, CrownBet and Aspinalls, partly offset by higher earnings from Crown Melbourne," Deutsche Bank analysts said in a research note.
Turnover from high-rolling VIP gamblers in Macau had fallen 51 per cent in the six months to June following a crackdown on corruption in China.
CrownBet, Crown's online sports book business, had been impacted by higher-than-expected advertising spending.
Aspinalls, Crown's London-based casino, had been hit by a downturn in global VIP turnover.
The Deutsche Bank analysts cut their forecasts despite a relaxation of transit visa restrictions in Macau that should allow more frequent and longer visits by Chinese gamblers.
The analysts said the changes to visa arrangements were a "minor positive" for the casino operators because it was the first supportive policy to be announced by macau authorities in 12 months.
The visa changes should assist VIP and some other premium gamblers to stay longer in Macau.
On the positive side for Crown Resorts, the analysts said Crown's flagship casino in Melbourne was benefiting from stronger domestic gaming revenue, a lift in the number of Chinese visitors, and growth in VIP turnover.
The Deutsche Bank report said Victorian gaming machine revenue was up 3.9 per cent in the five months to May.
"We would expect Crown Melbourne to be taking incremental share from the pubs and clubs," the report said.
Deutsche Bank revised its fiscal 2015 profit forecast for Crown to $481.1 million, down six per cent on the prior forecast of $512.1 million.
Shares in Crown closed 13 cents higher at $13.07.
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