Las Vegas Sands (LVS) Q1 Earnings Beat On Solid Macao Sales

Las Vegas Sands Corp. (NYSE:LVS) delivered yet another impressive performance, with both earnings and revenues beating the Zacks Consensus Estimate for the fifth straight quarter.

In first-quarter 2018, adjusted earnings per share of $1.04 surpassed the consensus mark of 86 cents by 20.9% and increased 57.6% year over year on higher revenues. Also, net revenues of $3.58 billion outpaced the consensus estimate of $3.36 billion and improved 16.7% on a year-over-year basis.

In the quarter under review, Las Vegas Sands’ results were driven by robust performance across Macao, Singapore and Las Vegas. Furthermore, the company remains focused on a convention-based Integrated Resort business model that helps in generating the most diversified set of cash flows and profit from non-gaming segments while bringing unsurpassed economic and diversification benefits to the regions in which it operates.

Following the results, the company’s shares increased 1.3% in after-hours trading yesterday. In the past six months, the stock has rallied 17.1%, outperforming the industry’s gain of 10.6%.

Property Performances: Asian Operations

The company's Asian business includes the following resorts:

The Venetian Macao

Net revenues increased 19.6% year over year to $868 million, owing to a 20.1% increase in casino revenues, 35.7% growth in room revenues, a 3.9% improvement in mall revenues and 35.3% rise in food and beverage revenues. However, revenues convention as well as retail and other revenues declined 5% each.

Adjusted property EBITDA was up 20.4% year over year to $348 million in the quarter.

Non-Rolling Chip Drop increased 29.9% and Rolling Chip volume improved 27.9%.

Sands Cotai Central

Net revenues were up 19.6% year over year to $549 million driven by a 21.5% improvement in casino revenues, a 26.2% rise in room revenues, a 20.8% increase in food and beverage revenues. However, mall as well as convention, retail and other revenues fell 26.3% and 14.3%, respectively, from the year-ago level.

Adjusted property EBITDA was $201 million, up 40.6% year over year.

While Non-Rolling Chip Drop rose 19.8%, Rolling Chip volume was down 17%.

The Parisian Macao

Revenues increased 15.8% year over year to $359 million owing to a 19.8% rise in casino revenues and a 13.8% increase in Rooms revenues. However, revenues from Food and Beverage, and Mall declined 6.3% and 11.8%, respectively.

Adjusted property EBITDA jumped 41.5% year over year to $116 million.

Non-Rolling Chip Drop improved 10.5% while Rolling Chip volume rose 23.5%.

The Plaza Macao and Four Seasons Hotel Macao

Net revenues increased 38.4% to $191 million on a 54.3% increase in casino revenues as well as 14.3% and 12.5% increase in food and beverage revenues as well as Rooms revenues, respectively. Mall revenues remained flat.

Adjusted property EBITDA increased 43.1% to $73 million.

Non-Rolling Chip Drop and Rolling Chip volume increased 37.3% and 66.9%, respectively.

Sands Macao

Revenues were down 13.5% year over year to $154 million due to a 13.4% decline in casino revenues and a 20% plunge in room revenues. Food and beverage revenues remained flat.

Adjusted property EBITDA declined 13% to $47 million.

Non-Rolling Chip Drop increased 7.2%, while Rolling Chip volume declined 53.1%.

Marina Bay Sands, Singapore

Net revenues improved 26.4% year over year to $872 million on account of 32.5% rise in casino revenues. Moreover, room revenues as well as convention retail and other revenues rose 6.4% and 13%, respectively. Mall as well as food and beverage revenues increased a respective 10.5% and 20.9%.

Adjusted property EBITDA in the quarter was $541 million, up 48.6%.

Non-Rolling Chip Drop were up 8.6%, whereas Rolling Chip volume declined 17.3%.

Domestic Operations

Las Vegas Operations

Net revenues from Las Vegas operations, which comprise The Venetian Las Vegas and The Palazzo including the Sands Expo and Convention Center, increased 7.2% to $477 million owing to a 3.3%, 15.4% and 14.1% increase in rooms, casino and convention, retail and other revenues, respectively. The results were, however, somewhat offset by a fall of 3.3% in food and beverage revenues.

Adjusted property EBITDA in the quarter was $141 million, up 15.6%.

Table Games Drop increased 13.4%, while Slot Handle rose 2.3%.

Sands Bethlehem, PA

Net revenues at Sands Bethlehem were $134 million, down 3.6% year over year due to a 3.3% decline in casino revenues and a 14.3% decrease in food and beverage revenues. Rooms, mall as well as convention, retail and other revenues remained flat in the quarter.

Operating Results

On a consolidated basis, adjusted property EBITDA was up 30.7% year over year to $1.50 billion in the quarter on robust operating momentum in Macao and Sands Cotai Central operations. Strong mass non-gaming revenues along with higher hotel occupancy and retail mall revenues drove adjusted EBITDA.

Adjusted net income increased 55.5% year over year to $821 million.

Balance Sheet

As of Mar 31, 2018, unrestricted cash balances were $2.63 billion. Total debt outstanding, including the current portion and net of deferred financing costs along with original issue discount, was $9.65 billion.

In the reported quarter, capital expenditures came in at $238 million. This was mainly owing to construction, development and maintenance activities of $125 million in Macao, $35 million at Marina Bay Sands, $75 million in Las Vegas and $3 million at Sands Bethlehem.

Quarterly dividend paid by the company was 75 cents per share, while it repurchased $75 million of common stock.

Las Vegas Sands has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Red Rock Resorts, Inc. (NASDAQ:RRR) has an Earnings ESP of +1.37% and a Zacks Rank #3. The company is likely to report first-quarter results on May 3.

Wingstop (NASDAQ:WING) has an Earnings ESP of +3.80% and a Zacks Rank #3. The company is slated to release first-quarter results on May 3, after market close.

Wendy’s (NASDAQ:WEN) has an Earnings ESP of +2.72% and a Zacks Rank #3. The company is scheduled to report first-quarter results on May 8, after market close.

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