It has been about a month since the last earnings report for Las Vegas Sands (LVS). Shares have added about 5.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Las Vegas Sands due for a pullback? 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 Q1 Earnings Beat, Down Y/Y on Coronavirus
Las Vegas Sands reported first-quarter 2020 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate after beating the same in preceding quarter. However, both the metrics declined sharply year over year on account of the coronavirus-induced shutdowns.
Earnings & Revenues Discussion
The company reported adjusted loss per share of 3 cents, narrower than the Zacks Consensus Estimate of loss of 8 cents. In the prior-year quarter, the company had reported adjusted earnings per share of 91 cents. Earnings in the quarter were primarily impacted by the coronavirus outbreak. However, net interest expenses declined in the quarter. Interest expense, net of amounts capitalized, improved to $131 million compared with $141 million in the year-ago quarter.
Net revenues totaled $1,782 million, which beat the consensus mark of $1,570 million. However, the reported figure declined 51.1% on a year-over-year basis. The top line was impacted by the coronavirus-induced shutdown. The pandemic has compelled casino operators to take stringent measures.
Las Vegas Sands’ Asia business includes the following resorts:
The Venetian Macao
Net revenues declined 64.9% year over year to $315 million. Casino and rooms revenues came in at $251 and $21 million, down 66.1% and63.2%, respectively. Food and beverage, and convention, retail and other revenues declined 77.3% and 59.1% year over year to $5 million and $9 million, respectively. Mall revenues decreased 48.2% year over year to $29 million.
Adjusted property EBITDA were down 86.4% year over year to $49 million in the quarter under review.
While non-rolling chip drop declined 63.9%, rolling chip volume was down 69.7%.
Sands Cotai Central
Net revenues plunged 70.5% year over year to $170 million owing to a decline 72.4%, 67.9% and 69.2% in casino revenues, rooms revenues, and food and beverage, respectively. Moreover, mall, and convention, retail and other revenues also declined 43.8% and 50% year over year, respectively.
Adjusted property EBITDA declined 100% year over year.
Both non-rolling chip drop and rolling chip volume declined 67.3% and 91.4%, respectively.
The Parisian Macao
Revenues amounted to $141 million, reflecting year-over-year decrease of 68.9%. The downside can primarily be attributed to a decline of 70.3% in casino revenues and 59.4%, 72.2%, 50% and 60%, decline in rooms, food and beverage, mall, convention and other retail revenues, respectively.
Adjusted property EBITDA plunged 101.8% year over year to a negative $3 million.
Non-rolling chip drop were down 65.8%, while rolling chip volume slumped 51.7%.
The Plaza Macao and Four Seasons Hotel Macao
Net revenues tanked 52.2% to $107 million owing to 52%, 60%, 66.7%, 45.2% decline in casino, rooms, food and beverage and mall revenues, respectively.
Adjusted property EBITDA declined 59.4% to $102 million.
While rolling chip volume decreased 63.8%, non-rolling chip drop fell 41%.
Revenues were down 54.6% year over year to $69 million owing to 54% decrease in casino revenues.
Adjusted property EBITDA were down 102.5%.
While rolling chip volume fell 57.8%, non-rolling chip drop declined 62.3%.
Marina Bay Sands, Singapore
Net revenues decreased 20.2% year over year to $612 million owing to 19.3%, 27.5%, 22.6%, 2.3% and 36% in casino revenues, rooms, food and beverage, mall, and convention, retail and other revenues, respectively.
Adjusted property EBITDA of $282 million in the first quarter was down 33.3%.
While non-rolling chip drop decreased 19.8%, rolling chip volume fell 6.9%.
Net revenues from Las Vegas operations, which comprise The Venetian Las Vegas and The Palazzo including the Sands Expo and Convention Center, dropped 15.1% to $400 million owing to decline of 9.7% and 16.7% in casino, and food and beverage revenues, respectively. Rooms revenues also decreased 19.1%. Moreover, convention, retail and other revenues declined13.5% year over year.
Adjusted property EBITDA in the reported quarter totaled $88 million, declining 36.2% on a year-over-year basis.
Table games drop were up 6.4%, while slot handle fell 9.7%.
On a consolidated basis, adjusted property EBITDA came in at $437 million in the first quarter, down 69.9% year over year. Las Vegas operating properties, Sands Macao, The Plaza Macao and Four Seasons Hotel Macao, Venetian Macao, Sands Cotai Central, The Parisian Macao and Marina Bay Sands, all witnessed decline in adjusted EBITDA.
As of Mar 31, 2020, unrestricted cash balances amounted to $2.6 billion. Total debt outstanding (excluding finance leases) totaled $12.3 billion.
In the reported quarter, capital expenditures totaled $320 million. This can primarily be attributed to construction, development and maintenance activities of $241 million in Macao, $46 million at Marina Bay Sands and $33 million in Las Vegas.
Quarterly dividend of 79 cents per share was paid out by the company. The company has suspended its quarterly dividend program citing the coronavirus-induced crisis.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -5216.67% due to these changes.
At this time, Las Vegas Sands has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
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.
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