LOS ANGELES: Las Vegas Sands Corp, the casino operator run by billionaire Sheldon Adelson, posted sharply higher quarterly revenue, but the total fell short of estimates, and the stock dropped nearly 7 percent on Thursday, Feb 3.
The company, which earns most of its money in Asia, had booming business in Macau and at its new resort in Singapore -- its single most profitable casino -- but the results fell short of some investors' lofty expectations.
Singapore profits were boosted by above-normal table game winnings for the casino. Adjusting for a normal "hold" rate (rates normally revert to a normal level over time), the property would have had earnings before interest, tax, depreciation and amortization (EBITDA) of around $290 million, rather than the reported $306 million, according to UBS analyst Robin Farley.
Rolling chip volume, or business from VIP tables, at the $5.7 billion Singapore casino resort, which began operating in April 2010, fell 21 percent to just over $8 billion compared with the previous quarter.
In Macau, the world's largest gambling market, the government said last month that gambling revenue rose more than 66 percent year-over-year in December.
That includes revenue at newer PROPERTIES [] such as Wynn Resorts Ltd's Encore Macau, which opened last April.
"We have seen strong trends out of Macau, but that didn't translate into significantly higher numbers for Sands versus where we were three months ago," said ITG Investment Research analyst Matthew Jacob.
Sands said quarterly revenue at its majority-owned Sands China subsidiary rose 13.1 percent to $1.09 billion, while adjusted EBITDA rose 36.7 percent to $332.8 million.
The company said it had some bad gaming table luck at its Four Seasons Macau casino, where profit margins fell to around 13 percent from 21 percent a year earlier.
Overall net revenue for the quarter rose 57 percent to $2.02 billion, which fell short of the $2.07 billion expected by analysts.
The company reported a quarterly net profit of $273 million, or 34 cents a share, compared with a loss of $113.9 million, or 17 cents a share, a year earlier.
Excluding one-time items, Sands earned 42 cents a share in the quarter, better than analysts' average estimate of 39 cents a share, according to Thomson Reuters I/B/E/S.
"It looked like a pretty good quarter," said Jefferies and Co analyst David Katz. "This is one of those stocks that people sort of set up for volatility."
Adelson, speaking on a conference call, said EBITDA in Singapore totaled more than $110 million in January.
In Las Vegas, Sands' EBITDA rose to $80.6 million in the fourth quarter from $56.9 million a year earlier.
"While we do see peaks and valleys in our business on a monthly or short-term basis, we have enjoyed a very predictable growth trajectory," Adelson said. "There is no reason to believe any fundamentals of our business are changing, so we have every expectation that this growth trajectory will continue."
He said Sands continues to seek expansion opportunities in the United States, Europe and Asia, with the first phase of its next Macau casino project slated to begin opening by the end of this year.
Sands has three casinos in Macau and is working on two other resorts, but that CONSTRUCTION [] work has been delayed, first by the financial crisis and more recently by government restrictions on immigrant labor.
Shares of Sands, which have more than tripled over the last 12 months and closed at $50.28 on the New York Stock Exchange on Thursday, were lower at $46.94 after-hours. - Reuters
The company, which earns most of its money in Asia, had booming business in Macau and at its new resort in Singapore -- its single most profitable casino -- but the results fell short of some investors' lofty expectations.
Singapore profits were boosted by above-normal table game winnings for the casino. Adjusting for a normal "hold" rate (rates normally revert to a normal level over time), the property would have had earnings before interest, tax, depreciation and amortization (EBITDA) of around $290 million, rather than the reported $306 million, according to UBS analyst Robin Farley.
Rolling chip volume, or business from VIP tables, at the $5.7 billion Singapore casino resort, which began operating in April 2010, fell 21 percent to just over $8 billion compared with the previous quarter.
In Macau, the world's largest gambling market, the government said last month that gambling revenue rose more than 66 percent year-over-year in December.
That includes revenue at newer PROPERTIES [] such as Wynn Resorts Ltd's Encore Macau, which opened last April.
"We have seen strong trends out of Macau, but that didn't translate into significantly higher numbers for Sands versus where we were three months ago," said ITG Investment Research analyst Matthew Jacob.
Sands said quarterly revenue at its majority-owned Sands China subsidiary rose 13.1 percent to $1.09 billion, while adjusted EBITDA rose 36.7 percent to $332.8 million.
The company said it had some bad gaming table luck at its Four Seasons Macau casino, where profit margins fell to around 13 percent from 21 percent a year earlier.
Overall net revenue for the quarter rose 57 percent to $2.02 billion, which fell short of the $2.07 billion expected by analysts.
The company reported a quarterly net profit of $273 million, or 34 cents a share, compared with a loss of $113.9 million, or 17 cents a share, a year earlier.
Excluding one-time items, Sands earned 42 cents a share in the quarter, better than analysts' average estimate of 39 cents a share, according to Thomson Reuters I/B/E/S.
"It looked like a pretty good quarter," said Jefferies and Co analyst David Katz. "This is one of those stocks that people sort of set up for volatility."
Adelson, speaking on a conference call, said EBITDA in Singapore totaled more than $110 million in January.
In Las Vegas, Sands' EBITDA rose to $80.6 million in the fourth quarter from $56.9 million a year earlier.
"While we do see peaks and valleys in our business on a monthly or short-term basis, we have enjoyed a very predictable growth trajectory," Adelson said. "There is no reason to believe any fundamentals of our business are changing, so we have every expectation that this growth trajectory will continue."
He said Sands continues to seek expansion opportunities in the United States, Europe and Asia, with the first phase of its next Macau casino project slated to begin opening by the end of this year.
Sands has three casinos in Macau and is working on two other resorts, but that CONSTRUCTION [] work has been delayed, first by the financial crisis and more recently by government restrictions on immigrant labor.
Shares of Sands, which have more than tripled over the last 12 months and closed at $50.28 on the New York Stock Exchange on Thursday, were lower at $46.94 after-hours. - Reuters
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