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Is a Beat in Store for Las Vegas Sands (LVS) in Q2 Earnings?

Las Vegas Sands Corp.LVS is slated to release second-quarter 2018 financial numbers on Jul 25, after market close. Last reported quarter, the company's earnings surpassed the Zacks Consensus Estimate by 20.9%.

Q2 Expectations

The question lingering in investors' minds now is whether Las Vegas Sands will be able to deliver a positive earnings surprise in the quarter to be reported. The Zacks Consensus Estimate for second-quarter earnings is pegged at 79 cents, higher than 73 cents reported in the year-ago quarter. Of late, the company's earnings estimates have been stable. In first-quarter 2018, it witnessed earnings growth of 57.6% on a year-over-year basis.

Meanwhile, analysts polled by Zacks expect revenues of nearly $3,282 million, up 4.5% from the prior-year quarter.

Let's delve deeper to find out how the company's top and bottom line will shape up this earnings season.

Factors at Play

Las Vegas Sands began 2018 on a positive note with both top and bottom line surpassing the consensus mark for the fifth straight quarter, when it reported first-quarter 2018 results. This momentum is likely to continue in the quarter to be reported as well. Robust performance by the company's The Venetian Macao and Sands Cotai Central segments is likely to drive results in the second quarter. Per the Zacks Consensus Estimate, The Venetian Macao and Sands Cotai Central segments are expected to witness revenue growth of 19.1% and 13.5%, respectively.

However, the company's Sands Macao segment has been reporting dismal performance since the last few quarters. This downtrend is expected to continue in the second quarter as well. The Zacks Consensus Estimate for the segment is pegged at $156 million, down 3.1% year over year.

For Las Vegas operations, the consensus estimate for second-quarter revenues is pegged at $423 million, reflecting a decline of 10.2% year over year. Nevertheless, the company is focusing on renovation and promotion of its Las Vegas properties in order to drive segmental performance. Meanwhile, the rise in employment rate and tourism in the region has been boosting demand at the company's properties. Furthermore, diversification of the company's resort portfolio and non-gaming options are expected to contribute significantly to revenues.

Also, EBITDA margins have been expanding consistently owing to focus on the mass and non-gaming segments that carry higher margins. Las Vegas Sands expects that it would continue to deliver growth in the non-gaming segment. Notably, the company has delivered margins growth of more than 30% since the beginning of 2012.

Las Vegas Sands Corp. Price, Consensus and EPS Surprise

Las Vegas Sands Corp. Price, Consensus and EPS Surprise | Las Vegas Sands Corp. Quote

Zacks Model Suggests a Beat

According to our quantitative model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP has a fair chance of beating estimates. Meanwhile, stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) are best avoided.

Las Vegas Sands has an Earnings ESP of +2.16% and a Zacks Rank #3, a combination that increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Stocks to Consider

Here are some companies from the same sector that are poised for an earnings beat this quarter.

Activision Blizzard, Inc. ATVI has an Earnings ESP of +4.44% and a Zacks Rank of 1. You can see the complete list of today's Zacks #1 Rank stocks here .

V.F. Corporation VFC has an Earnings ESP of +4.38% and a Zacks Rank #2.

Churchill Downs Incorporated CHDN has an Earnings ESP of +3.75% and a Zacks Rank #3.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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