Las Vegas, Nev.-based casino and hotel operator, Las Vegas Sands Corp. (LVS) posted dismal fourth quarter 2013 results with both the top and bottom lines missing the Zacks Consensus Estimate. However, earnings and revenue grew year over year.
Adjusted earnings of 72 cents per share increased 33.3% year over year driven by year over year growth in revenues. However, it missed the Zacks Consensus Estimate of 85 cents by 15.2%, which we believe was due to higher expenses.
Adjusted earnings exclude pre-opening expense, development expense, impairment loss, gain or loss on disposal of assets, loss on modification or early retirement of debt and legal settlement expense.
Quarterly net revenue increased 18.8% year over year to $3.66 billion, but missed the Zacks Consensus Estimate of $3.72 billion by 1.6%. The top line reflects decent performance at Macau and Las Vegas, partially offset by a decline in revenues at Marina Bay Sands, Singapore.
Despite a 15.1% year-over-year increase in operating expenses, operating margin expanded 240 basis points (bps) to 24.2% in the fourth quarter, driven by solid operating performance at Macau properties.
Consolidated adjusted property earnings before interest, taxes, depreciation and amortization (:EBITDA) were $1.21 billion, up 21.0% year over year, led by higher Macao gaming volumes.
Property Details
Las Vegas Operations (The Venetian Casino and The Palazzo)
Net revenue from the Las Vegas operations, which comprise The Venetian Las Vegas and The Palazzo, increased 25.1% year over year to $385.7 million, mainly driven by a 20.6% increase in food and beverage revenues and a 72.1% increase in Casino revenues.
During the quarter, revenue per available room (RevPAR) increased 4.5% year over year to $185.0 million with a 2.5% and 1.4% rise in average daily rate (:ADR) and occupancy, respectively. Adjusted property EBITDA was up 67.0% year over year to $88.2 million in the fourth quarter driven by increase in table games.
Sands Bethlehem, Pennsylvania
Sands Bethlehem opened the first phase of its facilities for business on May 22, 2009. Net revenue at Sands Bethlehem was $124.1 million in the fourth quarter, up 5.3% year over year, driven by higher mall revenues. Room revenues remained flat year over year with a 0.9% rise in RevPAR and a decline of 4.9% in occupancy rate. Adjusted property EBITDA was up 10.2% year over year to $30.3 million in the fourth quarter.
Macao Operations
Las Vegas Sands’ integrated resort properties and other assets in Macao are owned and operated by one of its majority-owned subsidiary – Sands China Ltd. The company continued to witness significantly higher visitation at its Macao properties in the fourth quarter.
During the reported quarter, revenue at Macao was up 28.0% year over year mainly driven by solid contribution from Sands Cotai Central and The Venetian Macao, partially offset by a 19.6% decline at Four Seasons Macao and just 3.8% growth at the company’s oldest Macao casino Sands Macao.
The company’s Macao business includes the following resorts:
The Venetian Macao
The Venetian Macao played a major role in augmenting the company’s revenues. Net revenue increased 36.3% year over year to $1.1 billion at The Venetian Macao with a 40.0% and 61.2% increase in casino revenues and Convention, Retail and Other revenues, respectively. Rolling Chip volume was up 32.3% year over year to $16.8 billion. The property witnessed solid traffic during the quarter.
RevPAR increased 10.0% in the quarter with an 8.5% rise in ADR. Adjusted property EBITDA was up 30.1% year over year to $433.4 million in the fourth quarter driven by increase in Rolling Chip volume and Non-Rolling Chip Drop.
Sands Cotai Central
In Sep 2012, the company successfully unveiled the second phase of its Integrated Resort offering – Sands Cotai Central – at the center of the Cotai Strip. Sands Cotai Central welcomed 4.7 million guests in the fourth quarter.
Net revenue at Sands Cotai Central stood at $790.7 million, which was 61.1% higher than the year-ago quarter’s revenues of $490.7 million. The quarterly revenues were driven by higher casino revenues, room revenues and strong traffic. In the quarter, Rolling Chip volume increased 72.7% year over year to $17.6 billion.
Adjusted property EBITDA was $237.8 million, up 120.2% year over year.
Four Seasons Macao
Unlike the third quarter, revenues at Four Seasons Hotel Macao and Plaza Casino declined 19.6% to $238.1 million mainly due to a 29.5% year-over-year decline in Casino revenues. However, RevPAR was up 16.9% with a rise in ADR and occupancy rate.
Sands Macao
Sands Macao’s revenues were up 3.8% year over year to $326.7 million mainly driven by room revenue. However, adjusted property EBITDA declined 3.8% year over year to $88.0 million in the fourth quarter.
Marina Bay Sands, Singapore
Revenues at Marina Bay Sands, which debuted in Apr 2010, went down 8.0% year over year to $659.8 million during the fourth quarter. Gains in mass gaming and non-gaming revenue were offset by soft VIP play.
Sands recorded 13.5% RevPAR growth, driven by a 15.5% rise in ADR.
Adjusted property EBITDA plunged 14.4% year over year to $258.8 million, led by 16.6% decline in Rolling Chip volume.
Full Year 2013 Highlights
Adjusted earnings per share in full year 2013 went up 35.5% year over year to $2.90 but missed the Zacks Consensus Estimate of $2.99 by 3.0%. Revenues were $13.8 billion, up 23.7% year over year, and missed the Zacks Consensus Estimate of $13.9 billion by 0.51%.
Our Take
Las Vegas currently has a Zacks Rank #2 (Buy). We cannot rule out a rank downgrade in the near term following the company’s dismal fourth quarter results. Some other stocks worth considering in the gaming industry include Bally Technologies, Inc. (BYI), Melco Crown Entertainment Limited (MPEL) and Wynn Resorts Ltd. (WYNN), all with a Zacks Rank #1 (Strong Buy).
Read the Full Research Report on LVS
Read the Full Research Report on WYNN
Read the Full Research Report on BYI
Read the Full Research Report on MPEL
- Professional Services
- Company Earnings
- Marina Bay Sands
- Las Vegas
- Sands Macao
- Las Vegas Sands Corp.
- Sands Cotai Central
- Macao
Las Vegas Sands Misses on Earnings, Sales; Up Y/Y
0 comments:
Post a Comment