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Las Vegas Sands (LVS) Q3 Earnings Top on Solid Revenue Growth

Las Vegas Sands Corp. LVS reported better-than-expected third-quarter 2017 results with both earnings and revenues beating the Zacks Consensus Estimate.

Adjusted earnings per share of 77 cents surpassed the Zacks Consensus Estimate of 67 cents by 14.9%, and increased 8.5% year over year owing to higher revenues. Per management, this solid performance was primarily owing to a full quarter of operations for The Parisian Macao and stronger results at Marina Bay Sands in Singapore.

Quarterly net revenue of $3.2 billion also beat the consensus mark by nearly 3% and increased 7.7% year over year.

Las Vegas Sands Corp. Price, Consensus and EPS Surprise

On a consolidated basis, adjusted property EBITDA was up 6% year over year to $1.21 billion during the quarter, owing to higher revenues.

Meanwhile, the operating environment in Macao continued to improve with market-wide gross gaming revenues increasing in all three months of the reported quarter. Further, Las Vegas Sands stated that Sands China’s mass and VIP gaming volumes outpaced the overall Macao market growth. According to the company, this strong gaming performance along with higher hotel occupancy and retail mall revenues in the third quarter drove its adjusted property EBITDA in Macao to $652 million, which is the best quarterly performance since fourth-quarter 2014.

Additionally, management is confident about Las Vegas Sands’ Cotai Strip portfolio of properties. It expects these properties to continue providing the economic benefits of diversification to Macao, help lure greater number of business and leisure travelers as well as provide Macao and the company with a superior platform for growth in the future.

Property Details: Asian Operations

The company's Asian business includes the following resorts:

The Venetian Macao

Net revenue declined 7.1% year over year to $718 million, owing to a 7.9% decrease in casino revenues, a 4.3% decline in rooms revenues and a 26.1% downward movement in convention, retail and other revenues. The metric was, however, offset to an extent by 5.8% improvement in mall revenues. Meanwhile, food and beverage revenues remained flat in the quarter under review.

Adjusted property EBITDA was down 16.5% year over year to $263 million in the quarter.

Non-Rolling Chip Drop declined 10.14% but Rolling Chip volume improved 0.4%.

Sands Cotai Central

Net revenue fell 8.5% year over year to $474 million, owing to a 12% decline in casino revenues, somewhat offset by an 8.2% rise in rooms revenues, along with a 3.8% increase in food and beverage revenues. Meanwhile, mall revenues as well as convention, retail and other revenues remained flat in the quarter.

Adjusted property EBITDA was $155 million, down 11.9% year over year.

While Non-Rolling Chip Drop fell 7.4%, Rolling Chip volume was up 1%.

The Parisian Macao

Revenues increased 15.8% sequentially to $418 million, owing to a 17.7% rise in casino revenues and a 9.4% improvement in rooms revenues. Notably, mall revenues as well as food and beverage revenues were down 5.9% and 6.3%, respectively, in the quarter. On the flip side, convention retail and other revenues remained flat.

Adjusted property EBITDA jumped 27.4% sequentially to $135 million.

Further, Non-Rolling Chip Drop improved 2.9% while Rolling Chip volume witnessed a surge of 84.8%.

Going forward, the company expects The Parisian Macao (which opened in September 2016) to continue delivering growth as the Macao market grows and continues to refine the property's service offerings to appeal the fastest growing and most lucrative segments in the Macao market.

The Plaza Macao and Four Seasons Hotel Macao

Net revenue declined 8.7% to $147 million, due to a 12.1% decrease in casino revenues and a 3.1% drop in mall revenues. However, food and beverage revenues improved 16.7%. Meanwhile, room revenues along with convention retail and other revenues remained flat.

Moreover, adjusted property EBITDA decreased 16.1% to $52 million.

Non-Rolling Chip Drop and Rolling Chip volume increased 10% and 56.1%, respectively.

Sands Macao

Revenues decreased 14.4% year over year to $143 million, owing to a 14.8% decline in casino revenues, a 50% plunge in convention retail and other revenues, along with a 14.3% drop in food and beverage revenues. Conversely, rooms revenues remained flat during the reported quarter.

Adjusted property EBITDA declined 10.9% to $41 million.

Also, Non-Rolling Chip Drop and Rolling Chip volume decreased 10.1% and 52%, respectively.

Marina Bay Sands, Singapore

Net revenue improved 4.1% year over year to $793 million, owing to a 6.3% increase in casino revenues.  While rooms revenues, food and beverage revenues, and convention retail and other revenues fell 14.7%, 11.1% and 7.4%, respectively, mall revenues remained flat,

Adjusted property EBITDA in the quarter was $442 million, up 13%.

Though Non-Rolling Chip Drop fell 4.3%, Rolling Chip volume increased 30.1%.

Notably, Marina Bay Sands' inventive programming, steady mass gaming play, potent non-gaming revenues and higher hold in VIP play boosted its performance in the reported quarter.

Domestic Operations

Las Vegas Operations

Net revenue from Las Vegas operations, which comprise The Venetian Las Vegas and The Palazzo, was down 1.6% year over year to $378 million, owing to a 9% fall in casino revenues and a 5.4% decline in room revenues. The results were, however, somewhat offset by 13.8% and 2.4% increases in food and beverage revenues as well as convention retail and other revenues, respectively.

Adjusted property EBITDA was down 11.6% year over year to $76 million.

In addition, Table Games Drop fell 7% in the quarter.

Sands Bethlehem, PA

Net revenue at Sands Bethlehem was $148 million, up 0.7% year over year, attributable to a 1.5% rise in casino revenues. Rooms, mall, food and beverage as well as convention, retail and other revenues remained flat in the quarter.

Adjusted property EBITDA was up 8.1% year over year to $40 million.

Nonetheless, Table Games Drop was up 3.2%.

Zacks Rank & Peer Releases

Las Vegas Sands holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other stocks in the same space, Eldorado Resorts, Inc. ERI and Melco Crown Entertainment Inc. MLCO are slated to release their quarterly numbers on Nov 2, while Caesars Entertainment Corporation CZR is scheduled to report on Nov 6.

The Zacks Consensus Estimate for the quarter’s earnings is pegged at 29 cents, 19 cents and 24 cents for Eldorado Resorts, Melco Crown and Caesars Entertainment, respectively.

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