Bloomberg News

Las Vegas Sands Calls at Three-Year Low Before Earnings

February 02, 2012

(Adds Macau January casino revenue in seventh paragraph.)

Feb. 1 (Bloomberg) -- Las Vegas Sands Corp. options traders are making the fewest bullish bets in three years on speculation that revenue growth may slow in Macau, which accounts for about half of the casino company’s sales.

The ratio of outstanding calls to buy versus puts to sell has dropped to 1.02-to-1, the lowest since October 2008, according to data compiled by Bloomberg. The Las Vegas-based company, which reports earnings today after U.S. exchanges close, rallied 1.4 percent to $49.81 at 11:42 a.m. New York time and has risen 17 percent this year.

Traders are buying puts on speculation that casino revenue in Macau, the world’s largest gambling hub, can’t sustain last year’s growth, according to Joe Kunkle, founder of, a Boston-based provider of options-market analytics. Casino revenue growth in the former Portuguese colony slowed to 42 percent last year from 58 percent in 2010, according to Macau’s Gaming Inspection and Coordination Bureau.

“We continue to remain cautious on the Macau gaming market, given slowing growth,” Cameron McKnight, a New York- based analyst at Wells Fargo & Co., wrote in a report today. Sales may fall as China’s expansion diminishes, said Cameron, who has a “market perform” rating the stock.

Put trading on Las Vegas Sands jumped to 68,514 contracts yesterday, the highest since May, while the ratio of puts changing hands versus call volume was 2-to-1, the highest since February 2010.

Analyst Estimates

The company may report fourth-quarter profit excluding some items of 57 cents a share, according to the average of 23 analyst estimates compiled by Bloomberg. Profit in the prior quarter beat projections as growth in both Singapore and Macau continued. Macau accounted for 49 percent of revenue in the third quarter, according to data compiled by Bloomberg.

Revenue at casinos in Macau jumped 35 percent to 25 billion patacas ($3.13 billion) in January, according to Macau’s gaming bureau. That was higher than the median estimate of 24 billion patacas from seven analysts surveyed by Bloomberg News.

The International Monetary Fund said Jan. 24 that it cut its forecast for China’s estimated expansion this year to 8.2 percent from a 9 percent forecast in September.

Sands China Ltd., the Macau-based unit of Las Vegas Sands that trades in Hong Kong, said yesterday that it will pay its first dividend and that it has enough cash to fund expansion plans in the region. The payout will occur on or about Feb. 28, Sands China said in a statement to Hong Kong’s stock exchange.

--With assistance from Vinicy Chan in Hong Kong and Joshua Fineman and Beth Jinks in New York. Editors: Joanna Ossinger, Nick Baker

-0- Feb/01/2012 16:28 GMT

To contact the reporters on this story: Jeff Kearns in New York at; Nikolaj Gammeltoft in New York at

To contact the editor responsible for this story: Nick Baker at

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