Tuesday, May 3, 2011

Las Vegas Sands (LVS) Kicked in Teeth on Earnings

Las Vegas Sands (LVS) is having the exact opposite experience that Wynn Resorts (WYNN) enjoyed during this earnings season.  As I type it is enjoying a 16% kick to the teeth in the after hours session.  This is the second quarter in a row expectations were too high, so I think management needs to do a better job setting the bar low so LVS can enjoy the "better than expected" Wall Street earnings game.

On a purely technical basis, the stock is going to be hurt by this gap down but for those with quite long term time horizons, the move to the 200 day moving average provides an attractive long term area to make a stand.  The next area of support is $36ish, which are the mid March lows; as long as the stock did not break below that it would seem attractive to me "long term".

As for the report, LVS reported 37 cents vs 44 cent expectation.  Revenue was more or less in line.  A big drag seemed to be occupancy rates, but on the positive side the revenue from each room increased substantially - much like Wynn.

On a full year basis the $1.80 EPS expected could be dropped to say $1.75, and at $40, the stock is much more attractive at about 22x forward estimates than when it trades at $50+.  Asia continues to grow like gangbusters.  Their tax rate is a concern - only 11% across the globe (17% in Singapore), I would assume at some point forward that has to increase. :)
  • Net revenue for the first quarter of 2011 was a record $2.11 billion, an increase of 58.2% compared to $1.33 billion in the first quarter of 2010.
  • We set quarterly records for net revenue and adjusted property EBITDA during the quarter. Strong revenue growth and margin expansion in Macau, together with the continuing ramp of growth in all areas at Marina Bay Sands in Singapore contributed to a strong financial performance overall.
  • In Macau, we experienced stronger gaming volumes at each of our Sands China properties, The Venetian Macao, the Sands Macao and the Plaza Casino at the Four Seasons Hotel Macao, while adjusted property EBITDA margin expanded across the Sands China property portfolio to reach a market-leading 33.4%
  • In Singapore, Marina Bay Sands produced $284.5 million of adjusted property EBITDA during the quarter and an EBITDA margin of 48.6%, although low hold on rolling play impacted our results by approximately $30 million in revenue. Record mass gaming and slot volumes coupled with steady growth in non-gaming revenue streams including hotel, food and beverage, retail and entertainment reflect the broad appeal of the property to Singapore's visitors from across the Asian region.

Full report here.

[Feb 4, 2011: Las Vegas Sands Struggles vs Expectations]
[Jul 29, 2010: Las Vegas Sands Wins Bet on Asia in Q2]
[May 7, 2010: Las Vegas Sands Narrows Loss]
[Feb 24, 2010:  First Phase of Singapore Casino for Las Vegas Sands to Launch in April]
[Nov 9, 2009: Las Vegas Sands Sets Hong Kong Macau IPO Range of $2.5B to $3.3B]
[Sep 3, 2009: Las Vegas Sands - Too Big to Fail?] 

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