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Las Vegas Sands (LVS) Down 3.2% Since Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Las Vegas Sands Corp.LVS . Shares have lost about 3.2% in the past month, outperforming the market.

Will the recent negative trend continue leading up to its next earnings release, or is LVS due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Las Vegas Sands Q4 Earnings Beat on Solid Revenues

Las Vegas Sands reported better-than-expected results in fourth-quarter 2017.

Adjusted earnings per share of 88 cents surpassed the Zacks Consensus Estimate of 77 cents by 14.3% and increased 41.9% year over year on higher revenues. Net revenues of $3.4 billion beat the consensus mark by 6.3% and increased 11.7% year over year.

The solid performance can be attributed to the scale and diversity of gaming and non-gaming services across Macao and Singapore operations.

Additionally, management is confident about Las Vegas Sands' Cotai Strip portfolio of properties. These properties continue to reap economic benefits of diversification, lure greater number of business and leisure travelers as well as provide the company with a superior platform for growth.

Property Performances: Asian Operations

The company's Asian business includes the following resorts:

The Venetian Macao

Net revenues increased 19.4% year over year to $844 million, owing to a 20.9% increase in casino revenues, 22.7% growth in room revenues, 9.5% rise in convention, retail and other revenues, 3.5% improvement in mall revenues and 14.3% increase in food and beverage revenues.

Adjusted property EBITDA was up 23.7% year over year to $324 million in the quarter.

Non-Rolling Chip Drop increased 21.5% and Rolling Chip volume improved 16.4%.

Sands Cotai Central

Net revenues rose 25.5% year over year to $557 million, driven by a 28.5% improvement in casino revenues, 19.7% rise in room revenues, 3.8% increase in food and beverage revenues, and 16.7% growth in convention, retail and other revenues. However, mall revenues fell 6.3% from the year-ago level.

Adjusted property EBITDA was $202 million, up 53% year over year.

While Non-Rolling Chip Drop rose 20.9%, Rolling Chip volume fell 16.7%.

The Parisian Macao

Revenues decreased 3.5% year over year to $332 million, owing to a 3.7% fall in casino revenues, 5.9% decline in food and beverage revenues, 11.1% decrease in mall revenues and 33.3% decline in convention, retail and other revenues. The downside was partially offset by a 16.7% increase in room revenues.

Adjusted property EBITDA fell 6.3% year over year to $89 million.

Non-Rolling Chip Drop improved 13.5%, while Rolling Chip volume rose 16.1%.

The Plaza Macao and Four Seasons Hotel Macao

Net revenues increased 10.4% to $180 million on a 12.4% increase in casino revenues as well as 28.6% and 12.1% increase in food and beverage revenues and mall revenues, respectively. Rooms and convention, retail and other revenues remained flat.

Adjusted property EBITDA increased 6% to $71 million.

Non-Rolling Chip Drop and Rolling Chip volume increased 24.3% and 6.7%, respectively.

Sands Macao

Revenues decreased 4.3% year over year to $154 million due to a 4.5% decline in casino revenues and 20% plunge in room revenues. Convention retail and other revenues and food and beverage revenues remained flat.

Adjusted property EBITDA declined 14.9% to $40 million.

Non-Rolling Chip Drop increased 1.2%, while Rolling Chip volume declined 46.7%.

Marina Bay Sands, Singapore

Net revenues improved 14.1% year over year to $825 million owing to a 15.8% rise in casino revenues. While room revenues and convention retail and other revenues fell 4.2% and 3.8%, respectively, mall and food and beverage revenues increased a respective 6.8% and 3.6%.

Adjusted property EBITDA in the quarter was $456 million, up 24.6%.

Non-Rolling Chip Drop and Rolling Chip volume fell 2.7% and 4%, respectively.

Domestic Operations

Las Vegas Operations

Net revenues from Las Vegas operations, which comprise The Venetian Las Vegas and The Palazzo including the Sands Expo and Convention Center, increased 2.4% to $422 million, owing to a 12% and 7.8% increase in food and beverage revenues and convention, retail and other revenues. The results were, however, somewhat offset by a fall of 4.6% and 1.4% in casino and room revenues, respectively.

Sands Bethlehem, PA

Net revenues at Sands Bethlehem were $142 million, up 2.2% year over year, attributable to a 2.3% rise in casino revenues. Rooms, mall, food and beverage as well as convention, retail and other revenues remained flat in the quarter.

Operating Results

On a consolidated basis, adjusted property EBITDA was up 19.7% year over year to $1.34 billion in the quarter on robust operating momentum in Macao operations. Strong mass non-gaming revenues along with higher hotel occupancy and retail mall revenues drove adjusted EBITDA.

Adjusted net income increased 42.6% year over year to $700 million.

Balance Sheet

As of Dec 31, 2017, unrestricted cash balances were $2.42 billion. Total debt outstanding, including the current portion and net of deferred financing costs along with original issue discount, was $9.64 billion.

Capital expenditures during the fourth quarter was $245 million. This was mainly due to construction, development and maintenance activities of $131 million in Macao, $59 million at Marina Bay Sands, $41 million in Las Vegas and $14 million at Sands Bethlehem.

Quarterly dividend paid by the company was 73 cents per share, while it repurchased $75 million of common stock.

2017 Highlights

For 2017, net revenues totaled $12.88 billion up 12.9% from 2016. Net income was up 61.4% to $3.26 billion from 2016.

EPS in the year was $3.04, reflecting a 30.5% year-over-year improvement.

Consolidated Adjusted Property EBITDA rose 18.6% year over year to $4.9 billion.

In 2017, the company paid dividends of $2.92 per share while it repurchased $375 million of common stock.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. There have been two revisions higher for the current quarter, while looking back an additional 30 days, we can see even more upward momentum.

Las Vegas Sands Corp. Price and Consensus

Las Vegas Sands Corp. Price and Consensus | Las Vegas Sands Corp. Quote

VGM Scores

At this time, LVS has a nice Growth Score of B, however its Momentum is doing a bit better with an A. However, the stock was also allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is more suitable for momentum investors than growth investors.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise LVS has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

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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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