Las Vegas Sands, the casino company that runs the Venetian and Palazzo on the Strip, as well as properties in Macau, Singapore and Pennsylvania, reported its first-quarter earnings today.
Company: Las Vegas Sands Corp. (NYSE: LVS)
Revenue: $2.72 billion, down 9.8 percent from the first quarter of 2015.
Earnings: $320.2 million, down 37.5 percent from the same period a year earlier. The company attributed the decline to weaker year-over-year results from its Macau casinos, a lower win percentage on rolling chip play at its Singapore casino and a “$35.8 million mark-to-market loss on Singapore dollar forward contracts.”
Earnings per share: 40 cents, compared to 64 cents in 2015’s first quarter.
What it means: Las Vegas Sands gets most of its revenue from Macau, where it has multiple resorts. The Market there has weathered 22 straight months of year-over-year declines in gaming revenue as a government-led corruption crackdown and weakness in the Chinese economy have hurt business from high rollers.
Revenue from Sands China Ltd., the company’s Macau subsidiary, dropped 7.9 percent in the first quarter to $1.63 billion. Sands is also preparing to debut its new $2.7 billion Parisian resort, which is on track for a mid-September opening on Macau’s Cotai Strip, Chairman and CEO Sheldon Adelson said on a conference call today.
Adelson said that despite the ongoing challenges in the Chinese gambling hub, he was still confident the Parisian could perform well, comparing its appeal to that of his company’s Venetian resort in Macau.
“I have not a shadow of doubt that the Parisian ... will replicate the success of the Venetian as another themed, iconic and must-see integrated resort destination for Macau’s visitors,” Adelson said.
The opening of the Parisian will come not long after Wynn Resorts Ltd. opens its $4.1 billion Wynn Palace, also located on the Cotai Strip. CEO Steve Wynn has said Wynn Palace should open in July or early August.
Responding to an analyst’s question about why the company didn’t want more time between the openings of Wynn Palace and the Parisian, Sands President Robert Goldstein suggested he wasn’t worried about the tight timeline.
“I’m a believer that these two products are unique,” he said. “I have a lot of confidence in what Steve Wynn is building and a lot of confidence in what Mr. Adelson is building.”
Goldstein also said the debut of the two resorts could prove to be an “inflection point” for the Macau market.
Otherwise, Las Vegas proved to be a brighter spot for Sands in the first quarter, as it has before. Net revenue there rose 2.3 percent year over year to $384.9 million, and operating income grew 11.2 percent to $78.3 million.
Meanwhile, at Marina Bay Sands in Singapore, net revenue for the first quarter was $603.7 million, down 23.1 percent from 2015. And at Sands Bethlehem in Pennsylvania, net revenue was $138.7 million, up 8.6 percent.
The company said its total outstanding debt at the end of the quarter was $9.51 billion.