Nevada-based
Las Vegas Sands Corp.
(
LVS
) recently reported adjusted earnings of 70 cents per share in the
first quarter of 2012, surpassing the Zacks Consensus Estimate of
60 cents and 89.2% higher than the year-ago quarter earnings of 37
cents per share.
On a GAAP basis, the company reported a net income of $498.9
million or 61 cents per share compared with $228.2 million or 28
cent per share in the year-ago quarter. The improvement
primarily reflects a rise in operating income and discontinuation
of preferred stock dividend, partially offset by an impairment
loss.
Quarterly net revenue climbed 30.8% year over year to $2.76
billion, outperforming the Zacks Consensus Estimate of $2.67
billion. Consolidated adjusted property EBITDA (earnings before
interest, taxes, depreciation and amortization) shot up 43.0% year
over year to $745.7 million.
The significant upside in quarterly results was attributable to
outstanding performance of Macao business and solid performance of
Singapore and Las Vegas business.
Macao
Businesses
Las Vegas Sands' integrated resort properties and other assets
in Macao are owned and operated by Sands China Ltd., which is a
majority-owned subsidiary of the company. Net revenue at Sands
China jumped 25.0% year over year to $1.45 billion during the
quarter. Adjusted property EBITDA perked up 20.5% to $450.6 million
during the quarter.
Net revenue increased 21.1% year over year to $772.8 million at
The Venetian Macao, while Sands Macao earned revenues of $349.1
million, up 8.1%. Moreover, revenues at Four Seasons Hotel
Macao and Plaza Casino surged 74.1% to $299.6 million, driven by
strong visitation and growth in Macao.
Revenue per Available Room (RevPar) improved across all the
three properties; Venetian Macao, Four Seasons Hotel Macao and
Plaza Casino and Sands Macao.
Macao, the only Chinese city where gambling is legal, is
experiencing higher gaming volume due to gaming-friendly policies
of the local government. The performance at Macao is also driven by
strong growth at mass table and slot businesses, along with the
contribution from non-gaming amenities. On April 11, Las Vegas also
opened the first phase of its latest Integrated Resort offering,
Sands Cotai Central at the centre of the Cotai Strip. We
believe that this will drive additional visitation in Macao and
will further boost Las Vegas market share in Macao.
Las Vegas
Businesses
Net revenue from the Las Vegas operations, which consist of The
Venetian Las Vegas and The Palazzo, leaped 26.1% year over year to
$384.6 million. The upside in revenue was driven by growth in slot
handle, table games play, and hotel revenues along with stronger
group meeting and convention business. Adjusted property EBITDA
shot up 77.6% to $115.8 million. The company's Las Vegas business
is improving as it continues to focus on cash revenues to drive
visits and is significantly cutting back on compensation allotment
and other promotions. Management also remains encouraged as
convention bookings continue to improve.
Marina Bay Sands in Singapore
Marina Bay Sands, which debuted in April 2010, earned revenues
of $848.7 million during the first quarter of 2012, up 45.1% year
over year. The revenue growth was driven by robust VIP, mass gaming
and slot volumes coupled with strong visitation from all over Asia
and higher revenue streams from non-gaming facilities. Adjusted
property EBITDA rose 66.1% to $472.5 million.
Singaporeis poised to grow as the surrounding areas have a high
propensity to gamble and further development in transport
infrastructure will drive more tourists.
Balance Sheet
At end of the quarter, the company had $4.06 billion in
unrestricted cash balance. Total debt outstanding, including the
current portion, was $9.9 billion. The company has scheduled
principal payment requirements for 2012 and 2013 of $352.0 million
and $543.4 million, respectively.
Our Take
We believe that the company is on track to deliver solid
results. We remain bullish regarding the growth prospects at Macao
and Marina Bay Sands in Singapore is a significant catalyst for the
company. Moreover, performance at Las Vegas also remains solid
benefiting from global travel demand. The company reported
better-than-expected results, which will likely drive the estimates
going forward.
The company holds a Zacks #2 Rank, which translates into a 'Buy'
rating over the short term. We also maintain our long-tern
"Neutral" recommendation on the stock.
One of Las Vegas Sands' primary competitors
MGM Resorts International
(
MGM
) will report its first quarter 2012 earnings on May 3, 2012.
LAS VEGAS SANDS (
LVS
): Free Stock Analysis Report
MGM RESORTS INT (
MGM
): Free Stock Analysis Report
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