LOS ANGELES: Billionaire Sheldon Adelson's Las Vegas Sands Corp disappointed investors with a lower-than-expected quarterly profit at its Singapore casino-resort, sending shares of the company down 10 percent on Tuesday, May 3.
Sands posted first-quarter earnings below Wall Street forecasts and said lower-than-normal casino table game winnings hit its Singapore revenue by about $30 million and its Las Vegas revenue by about $45 million.
Its rivals' stock also slid. MGM Resorts International was down 2.4 percent after the bell, while Wynn Resorts Ltd slipped 1.4 percent.
Sands, which operates the Venetian and Palazzo resorts on the Las Vegas Strip, earns most of its money in Asia, from its newest resort in Singapore and in Macau, where allegations of malfeasance by a former employee have prompted investigations by regulators such as the U.S. Department of Justice.
Adjusting for one-time items, the casino operator earned 37 cents a share in the quarter, which fell short of analysts' average estimate of 44 cents a share, according to Thomson Reuters I/B/E/S.
Sands said quarterly adjusted EBITDA at its majority-owned Sands China Ltd subsidiary rose 46.1 percent to $378.6 million, which was in line with analyst estimates.
But Marina Bay Sands in Singapore -- which opened a year ago -- generated adjusted EBITDA of $284.5 million, which was well below the average Wall Street estimate of $325 million.
The profit margin at the Singapore resort was 48.6 percent, down from 54.6 percent in the fourth quarter of last year.
"Everybody is freaking out about the Singapore margins," said Hudson Securities analyst Robert LaFleur. "They are generating a phenomenal amount of EBITDA, but the question is we are going through the first year trying to figure out the true profit potential of that market."
Singapore has licensed two gambling resorts: Sands and another property run by Genting Singapore Plc. Unlike other gambling jurisdictions, including Macau and the state of Nevada, the city-state does not announce monthly gambling revenue totals, making it more difficult for investors to gauge the market.
Aside from its bad luck at the tables, officials at Sands said the company augmented its receivables reserves in Singapore by about $11 million, but said overall operating expenses were steady.
"There is nothing whatsoever that makes us think margins will decrease," Adelson said on a conference call.
In Las Vegas, Sands posted adjusted EBITDA of $65.2 million, which was also short of analyst estimates, as strong group meeting and convention business was offset by the low rate of casino winnings at table games.
The company reported a quarterly net profit of $228.2 million, or 28 cents a share, compared with a net loss of $28.9 million, or 4 cents a share, a year earlier.
Overall net revenue for the quarter totaled $2.11 billion. Analysts had expected a tad more, or $2.14 billion.
Sands shares, which closed at $45.87, were lower at $41.44 in after hours trading. - Reuters
Sands posted first-quarter earnings below Wall Street forecasts and said lower-than-normal casino table game winnings hit its Singapore revenue by about $30 million and its Las Vegas revenue by about $45 million.
Its rivals' stock also slid. MGM Resorts International was down 2.4 percent after the bell, while Wynn Resorts Ltd slipped 1.4 percent.
Sands, which operates the Venetian and Palazzo resorts on the Las Vegas Strip, earns most of its money in Asia, from its newest resort in Singapore and in Macau, where allegations of malfeasance by a former employee have prompted investigations by regulators such as the U.S. Department of Justice.
Adjusting for one-time items, the casino operator earned 37 cents a share in the quarter, which fell short of analysts' average estimate of 44 cents a share, according to Thomson Reuters I/B/E/S.
Sands said quarterly adjusted EBITDA at its majority-owned Sands China Ltd subsidiary rose 46.1 percent to $378.6 million, which was in line with analyst estimates.
But Marina Bay Sands in Singapore -- which opened a year ago -- generated adjusted EBITDA of $284.5 million, which was well below the average Wall Street estimate of $325 million.
The profit margin at the Singapore resort was 48.6 percent, down from 54.6 percent in the fourth quarter of last year.
"Everybody is freaking out about the Singapore margins," said Hudson Securities analyst Robert LaFleur. "They are generating a phenomenal amount of EBITDA, but the question is we are going through the first year trying to figure out the true profit potential of that market."
Singapore has licensed two gambling resorts: Sands and another property run by Genting Singapore Plc. Unlike other gambling jurisdictions, including Macau and the state of Nevada, the city-state does not announce monthly gambling revenue totals, making it more difficult for investors to gauge the market.
Aside from its bad luck at the tables, officials at Sands said the company augmented its receivables reserves in Singapore by about $11 million, but said overall operating expenses were steady.
"There is nothing whatsoever that makes us think margins will decrease," Adelson said on a conference call.
In Las Vegas, Sands posted adjusted EBITDA of $65.2 million, which was also short of analyst estimates, as strong group meeting and convention business was offset by the low rate of casino winnings at table games.
The company reported a quarterly net profit of $228.2 million, or 28 cents a share, compared with a net loss of $28.9 million, or 4 cents a share, a year earlier.
Overall net revenue for the quarter totaled $2.11 billion. Analysts had expected a tad more, or $2.14 billion.
Sands shares, which closed at $45.87, were lower at $41.44 in after hours trading. - Reuters
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