Las Vegas, Nev.-based casino and hotel operator,
Las Vegas Sands Corp.
) second-quarter 2013 adjusted earnings of 72 cents per share,
beat the Zacks Consensus Estimate of 69 cents by 4.3% and the
comparable year-ago quarter's earnings by 41.2%. Earnings in the
quarter received a boost from the company's margin expansion.
Quarterly net revenue increased 25.6% year over year to $3.24
billion but fell short of the Zacks Consensus Estimate of $3.29
billion by 1.5%. The company's Macau as well as Singapore
businesses backed the year-over-year rise in revenues. Visitation
in Macao market remains strong ensuring a speedy recovery from
the damage caused by the weak macroeconomic condition in
The operating margin expanded 870 basis points (bps) to 24.1%
in the first quarter. The rise was mainly attributable to lower
pre-opening costs and reduced development expenses.
Consolidated adjusted property EBITDA (earnings before
interest, taxes, depreciation and amortization) was $1.17
billion, up 29.0% year over year, driven by higher gaming volumes
Property Level in Detail
(The Venetian Casino and The Palazzo)
Net revenue from the Las Vegas operations increased 5.6% year
over year to $345.7 million, mainly driven by an 11.1% increase
in casino revenues. Moreover, non-gaming revenues were up 3.4%
year over year to $240.6 million, benefited by improved revenues
from the room, and convention, retail and other segments offset
somewhat by lower food and beverage sales.
During the quarter, average daily rate (ADR) remained flat at
$205 million but occupancy improved 540 bps and came in at 91.6%
which led to an increase of 6.8% in revenue per available room
(RevPAR). EBITDA margin fell 150 bps to 18.2% in the second
quarter due to higher costs.
Sands Bethlehem, Pennsylvania
Sands Bethlehem in Bethlehem, Pa. opened the first phase of
its facilities for business on May 22, 2009. Net revenue at Sands
Bethlehem was $126.8 million in the first quarter, up 10.2% year
over year, driven by a 10.3% improvement in casino revenues. Room
revenues increased 16.7%, primarily attributable to an 18.2% rise
in RevPAR due to higher occupancy rate. EBITDA margin increased
310 bps to 26.5%, gaining from higher top line.
Las Vegas Sands' integrated resort properties and other assets
in Macao are owned and operated by one of its majority-owned
subsidiary - Sands China Ltd. The company continues to witness
significantly higher visitation in its Macao properties in the
The company's Macao business includes the following
The Venetian Macao
Net revenue increased 37.8% to $894.7 million at The Venetian
Macao, driven by higher traffic and a 42.6% increase in casino
revenues. The Venetian Macao played a major role in augmenting
the company's revenues.
RevPAR increased only 0.5% in the quarter with a 70 bps
improvement in occupancy, offset by a 0.4% decline in ADR. EBITDA
margin increased 500 bps to 40.3%, gaining from higher top
Sands Cotai Central
On Sep 20, 2012, the company successfully unveiled the second
phase of its Integrated Resort offering - Sands Cotai Central -
at the centre of the Cotai Strip. Sands Cotai Central welcomed
3.7 million guests in the second quarter.
Net revenue at Sands Cotai Central stood at $584.0 million
which was significantly higher than the year-ago quarter's
revenues of $265.6 million. The quarterly revenues were driven by
higher casino and no-casino revenues and strong traffic. EBITDA
margin increased 550 bps to 25.0%, driven by higher gaming
We believe that the facilities provided by Sands Cotai,
especially its high gaming potential, will further boost Las
Vegas Sands' market share in Macao.
Four Seasons Macao
Revenues at Four Seasons Hotel Macao and Plaza Casino
increased 3% to $274.1 million with 8.8% RevPAR growth and higher
Sands Macao's revenues were up 8.5% to $294.7 million due to
an 8.6% rise in casino revenues. EBITDA margin increased 370 bps
Bay Sands, Singapore
Revenues at Marina Bay Sands, which made its debut in Apr
2010, jumped 6.4% to $739.5 million during the second quarter
with significant improvement in gaming and non-gaming revenues.
Sands also enjoyed an 8.3% RevPAR growth, driven by 8% rise in
ADR. EBITDA margin also increased 50 bps to 48.1%, led by higher
rolling chip volume.
After posting weak results in the past few quarters the
company's business at Marina Bay Sands, Singapore is stabilizing.
The company's mass revenues in the region are showing signs of
improvement following its new marketing programs and higher
On Jun 5, 2013, the company approved a new $2.0 billion share
repurchase plan. At the end of the second quarter, Las Vegas
bought back shares worth $46.5 million.
Other Stocks to Consider
Las Vegas Sands currently carries a Zacks Rank #2 (Buy). Some
other companies from the industry that are worth looking at the
current level include
Multimedia Games Inc.
Full House Resorts Inc.
Asia Entertainment & Resources Ltd.
). While Multimedia Games carries a Zacks Rank #1 (Strong Buy),
Full House Resorts and Asia Entertainment & Resources carry a
Zacks Rank #2 (Buy).
ASIA ENTMNT&RES (AERL): Free Stock Analysis
FULL HOUSE RESO (FLL): Free Stock Analysis
LAS VEGAS SANDS (LVS): Free Stock Analysis
MULTIMEDIA GAME (MGAM): Free Stock Analysis
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