Las Vegas Sands (LVS) Rides Macau and Singapore to Another Earnings Beat

Very good earnings from casino operator Las Vegas Sands (LVS) last night, as the company reported a 54 cent quarter versus expectations of 44 cents.  Revenue boomed by 47%.  Unlike Wynn Resorts (WYNN), very little progress was seen in Las Vegas, but the U.S. is now a small fraction of LVS business.   With a fifth location opening in Macau in the coming years, the future remains bright. The stock was up about 5% in after hours yesterday evening.

Via AP:

  • Casino-resort operator Las Vegas Sands Corp. said Tuesday that it earned $367.6 million for the second quarter, reversing a loss of $4.7 million a year earlier as its revenue rose almost 50 percent. The company led by billionaire Sheldon Adelson said its results in Las Vegas improved as the company focused on attracting conventioneers and other business travelers and curbed spending on freebies to attract gamblers to slot machines and table games. At the Venetian and Palazzo casinos in Las Vegas, gambling revenue rose just 2.2 percent to $105.1 million as the company cut its promotional allowances nearly 60 percent.
  • Most of Sands’ $2.35 billion in revenue — and most of the increase — came in Macau, where it took in $1.21 billion. The company’s revenue in Singapore was $737.6 million. In Las Vegas, where the company is based, revenue rose 18.2 percent to $332.5 million.
  • Sands said Marina Bay Sands in Singapore is on its way to becoming the most profitable casino-resort ever. It opened last year.
  • Sands said its adjusted earnings were $438.6 million, or 54 cents per share, for the period that ended June 30. That beat analysts’ average forecast for adjusted profit of 43 cents per share. Analysts expected revenue of $2.2 billion, versus $2.35 billion reported. Sands revenue in the same period last year was $1.59 billion.
  • Sands China, the subsidiary that runs the company’s casinos in Macau, doubled its net income to $267.4 million, compared with $133.6 million during the same period last year.
  • “The growth of our higher-margin mass table and slot businesses, together with the contribution from the important non-gaming (hotel, retail and convention) components of our integrated resort business model, continue to drive significant margin improvement at Sands China,” the company said in a statement.

Analyst view:

  • “Among the destination operators, we believe the valuation for Las Vegas Sands is most compelling considering the growth potential in Singapore, relatively low near-term expectations and its projects already under construction in Macau.,” Brean Murray analyst Ryan Worst wrote in a note. “We view Las Vegas Sands as the most attractive growth story in the industry, as its $4.1 billion development of Sites 5 and 6 should drive growth in 2012 and 2013.”

No position

About Mark Hanna 542 Articles

Affiliation: Hanna Capital, LLC

Mark Hanna is President and Owner of Hanna Capital, LLC, a registered investment advisory firm. Mark has been a follower of markets since the late 80s, with a focus on individual equities since the mid 90s. He has been a well known commentator in the financial blogosphere for the past 5 years, following a career in corpoporate finance and accounting. Mark attended the University of Michigan where he graduated with a degree in Economics.

As an avid reader, Market Montage is the personal blogging site for Mark to share his views on economics, markets, and the like. Occasional cynicism and wit shall be deployed in his postings.

Follow Mark on Twitter @fundmyfund.

Visit: Market Montage

Be the first to comment

Leave a Reply

Your email address will not be published.