Bloomberg News

Las Vegas Sands Misses Estimates as Singapore Falls Short (2)

July 24, 2013

Las Vegas Sands Corp. (LVS:US), the largest U.S.-based casino company, posted second-quarter results that fell short of analysts’ estimates after winnings in Singapore and Macau came in lower than projected.

Excluding items, profit of 65 cents a share missed analysts’ projections of 68 cents, the average of 22 estimates (LVS:US) compiled by Bloomberg. Net income soared to $529.8 million, or 64 cents a share, from $240.6 million, or 29 cents, the Las Vegas-based company said today in a statement (LVS:US).

The company cited a lower win percentage at the Marina Bay Sands in Singapore and the Sands Cotai Central in the Chinese gambling enclave of Macau, the largest market for Las Vegas Sands, as well as competitive pressure on hotel room rates in the Nevada market.

“We don’t see the miss as significant given the strong volumes,” John Kempf, an analyst at RBC Capital Markets in New York, said in a research note. He recommends buying the stock.

Las Vegas Sands was little changed in extended trading after results were announced. The stock lost 1.4 percent to $54.95 at the close in New York and is up 19 percent this year.

Second-quarter revenue increased 26 percent to $3.24 billion from $2.58 billion a year earlier, the company said. Analysts were forecasting $3.3 billion.

The share of bets the casino kept in Singapore was below expectations, Rob Goldstein, the company’s executive vice president for global gaming operations, said on a conference call with analysts.

“We take very large bets there and the swings are dramatic,” Goldstein said.

Room Rates

In Las Vegas, the company continues to see pressure on hotel room rates from MGM Resorts International (MGM:US) and Caesars Entertainment Corp. (CZR:US), two competitors with high indebtedness that dominate the Strip, Chairman and Chief Executive Officer Sheldon Adelson said on the call.

“They need bodies in their beds and the only way to get them is to buy the business,” Adelson said.

Betting receipts in Macau are expected to show a “visible” slowdown in the second half of the year as high-stakes gamblers contribute a smaller share of revenue, the city’s Monetary Authority said on July 17. Visits to Macau grew 10 percent in June and are up 4.2 percent this year, Bill Lerner, an analyst with Union Gaming Group in Las Vegas, wrote in a note today.

Adelson said he saw no evidence that reports of a slowdown in China were impacting business in Macau.

“Consumer behavior is going in the right direction,” Adelson said.

To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net


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Companies Mentioned

  • LVS
    (Las Vegas Sands Corp)
    • $74.6 USD
    • -0.33
    • -0.44%
  • MGM
    (MGM Resorts International)
    • $25.55 USD
    • -0.17
    • -0.67%
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