It has been about a month since the last earnings report for Las Vegas Sands (LVS). Shares have lost about 11.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Las Vegas Sands 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 & Revenues Beat Estimates
Las Vegas Sands reported fourth-quarter 2019 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate after missing the same in the trailing two quarters. Moreover, both the metrics also improved year over year.
Adjusted earnings came in at 88 cents per share, which surpassed the Zacks Consensus Estimate of 79 cents and also improved 14.3% year over year. The company’s earnings benefited from non-recurring non-cash income tax items owing to the implementation of U.S. tax reform in 2018. Earnings also benefited from decline in interest expenses. In the reported quarter, interest expense, net of amounts capitalized, improved to $134 million compared with $138 million in the year-ago quarter.
Net revenues totaled $3,509 million, which beat the consensus mark of $3,379 million and increased 1% on a year-over-year basis. The top line was driven by rise in casino, food and beverage and mall revenues.
Asian Operations
Las Vegas Sands’ Asia business includes the following resorts:
The Venetian Macao
Net revenues declined 1.2% year over year to $908 million. Casino and rooms revenues came in at $748 and $54 million, up 0.1% and down 3.6%, respectively. Food and beverage, and convention, retail and other revenues declined 10.5% and 43.8% year over year to $17 million and $18 million, respectively. Mall revenues improved 9.2% year over year to $71 million.
Adjusted property EBITDA were up 3.7% year over year to $368 million in the quarter under review.
While non-rolling chip drop declined 3.3%, rolling chip volume declined 37.4%.
Sands Cotai Central
Net revenues decreased 9.5% year over year to $505 million owing to a decline 9.3%, 9.3% and 8% in casino revenues, rooms revenues, and food and beverage, respectively. Moreover, mall, and convention, retail and other revenues also declined 4.8% and 37.5% year over year, respectively.
Adjusted property EBITDA was $180 million, down 7.2% year over year.
Both non-rolling chip drop and rolling chip volume declined 1.7% and 63.8%, respectively.
The Parisian Macao
Revenues amounted to $401 million, reflecting year-over-year decrease of 3.1%. The downside can primarily be attributed to a decline of 3.2% in casino revenues. However, rooms and food and beverage revenues were flat, respectively.
Adjusted property EBITDA decreased 7.6% year over year to $122 million.
Non-rolling chip drop were down 1%, while rolling chip volume declined 13.2%.
The Plaza Macao and Four Seasons Hotel Macao
Net revenues surged 40.6% to $246 million driven by an improvement of 56.5% and 10% in casino and rooms, respectively. Food and beverage revenues were flat in the reported quarter.
Adjusted property EBITDA jumped 59.4% to $102 million.
While rolling chip volume decreased 10%, non-rolling chip drop advanced 25.5%.
Sands Macao
Revenues were down 3.8% year over year to $150 million owing to 4.9% decrease in casino revenues.
Adjusted property EBITDA rose 5.3% to $40 million.
While rolling chip volume declined 35.8%, non-rolling chip drop declined 2.9%.
Marina Bay Sands, Singapore
Net revenues rose 17.5% year over year to $853 million due to an improvement of 20.4%, 6.4%, 25.5%, 5.9% and 7.7% in casino revenues, rooms, food and beverage, mall, and convention, retail and other revenues, respectively.
Adjusted property EBITDA of $457 million in the fourth quarter increased 26.2%.
While non-rolling chip drop decreased 2.2%, rolling chip volume improved 16%.
Domestic Operations
Las Vegas
Net revenues from Las Vegas operations, which comprise The Venetian Las Vegas and The Palazzo including the Sands Expo and Convention Center, improved 12% to $475 million on a rise of 30.3% and 18.8% in casino, and food and beverage revenues, respectively. Rooms revenues also increased 4.1%. Moreover, convention, retail and other revenues increased 1.9% year over year.
Adjusted property EBITDA in the reported quarter totaled $120 million, surging 20% on a year-over-year basis.
Table games drop were up 2.7%, while slot handle advanced 5.9%.
Operating Results
On a consolidated basis, adjusted property EBITDA came in at $1.38 billion in the fourth quarter, up 9.1% year over year. Las Vegas operating properties, Sands Macao and The Plaza Macao and Four Seasons Hotel Macao and Venetian Macao adjusted EBITDA improved in the quarter, while Sands Cotai Central and The Parisian Macao witnessed decline in adjusted EBITDA.
Balance Sheet
As of Dec 31, 2019, unrestricted cash balances amounted to $4.23 billion. Total debt outstanding (excluding finance leases) totaled $12.48 billion.
In the reported quarter, capital expenditures totaled $460 million. This can primarily be attributed to construction, development and maintenance activities of $352 million in Macao, $61 million at Marina Bay Sands and $47 million in Las Vegas.
Quarterly dividend of 77 cents per share was paid out by the company, while it repurchased $300 million of its common stock.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -47.28% due to these changes.
VGM Scores
Currently, Las Vegas Sands has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Las Vegas Sands has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Las Vegas Sands Corp. (LVS): Free Stock Analysis Report
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