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Las Vegas Sands (LVS) Misses on Q4 Earnings, Stock Down

Zacks Equity Research

Shares of Las Vegas Sands Corp. LVS declined over 4% in after-hour trading on Jan 25, after the company reported lower-than-expected results in fourth-quarter 2016.

Adjusted earnings per share (EPS) of 62 cents lagged the Zacks Consensus Estimate of 65 cents by 4.6%. Meanwhile, the figure remained flat on a year-over-year basis.


 

Quarterly net revenues of $3.08 billion lagged the Zacks Consensus Estimate of $3.15 billion by over 2% but increased 7.4% year over year due to somewhat better performance in Macao.

Notably, the company stated that its industry-leading Cotai Strip property portfolio in Macao generated growth of 16% in the mass gaming segment. This is considered to be its strongest performance in Macao's most important and profitable segment, since the second quarter of 2014.

Additionally, Las Vegas Sands said that the operating environment in Macao continued to improve during the quarter and its Macao portfolio experienced strong visitation and higher hotel occupancy rates. Moreover, the opening of its subsidiary, Sands China Ltd.’s new resort, The Parisian Macao (opened on Sep 13), on the Cotai Strip has been a valuable addition to its portfolio. The resort is expected to continue attract visits by tourists and leisure gamblers, thereby boosting up revenues.

On a consolidated basis, adjusted property earnings before interest, taxes, depreciation and amortization (EBITDA) increased 6.1% year over year to $1.12 billion during the quarter owing to higher revenues.

Las Vegas Sands Corp. Price, Consensus and EPS Surprise

 

Las Vegas Sands Corp. Price, Consensus and EPS Surprise | Las Vegas Sands Corp. Quote

Property Details: Asian Operations

The company's Asian business includes the following resorts:

The Venetian Macao

Net revenues decreased 7.1% year over year to $707 million, due to a 4.7% fall in casino revenues, a decrease of 12%, 12.5% and 8.1% in rooms, food and beverage, and mall revenues, respectively, along with a 30% drop in convention, retail and other revenues.

Adjusted property EBITDA was down 12.1% to $262 million in the reported quarter.

Additionally, Non-Rolling Chip Drop declined 1.6% and Rolling Chip volume plunged 13.9%.

Sands Cotai Central

Net revenues fell 12.3% year over year to $444 million, owing to a 14.3% decline in casino revenues, a 11.1% drop in mall revenues along with a 14.3% plunge in convention retail and other revenues, offset by a 2.9% increase in room revenues. Meanwhile, food and beverage revenues remained flat.

Adjusted property EBITDA was $132 million, down 17.5%.

Moreover, Non-Rolling Chip Drop and Rolling Chip volume declined 2.6% and 31.5%, respectively.

The Parisian Macao

Net revenues were $344 million, while adjusted property EBITDA came in at $95 million in the reported quarter.

Four Seasons Hotel Macau and Plaza Casino

Net revenues rose 3.2% to $163 million, due to a 6.1% increase in casino revenues. While room, food and beverage, convention retail and other revenues remained flat, mall revenues witnessed a decline of 13.2%.  

Moreover, adjusted property EBITDA increased 1.5% to $67 million.

Adding to the positives, Non-Rolling Chip Drop surged 15.1% and Rolling Chip volume rose 2.8%.

Sands Macau

Revenues declined 21.5% year over year to $161 million, owing to a 21.7% decrease in casino revenues, a 16.7% fall in room revenues, a 12.5% drop in food and beverage revenues, and a 33.3% plunge in convention retail and other revenues.

Adjusted property EBITDA fell 7.8% to $47 million.

Non-Rolling Chip Drop and Rolling Chip volume decreased 15.1% and 47.9%, respectively, during the quarter.

Marina Bay Sands, Singapore

Net revenues increased 2.8% year over year to $723 million, owing to a 5.6% increase in casino revenues, a 8% rise in room revenues and a 4.8% improvement in mall revenues. On the other hand, while food and beverage revenues remained flat, convention retail and other revenues fell 10.3%.

Adjusted property EBITDA in the quarter was $366 million, up 8%.

Meanwhile, Non-Rolling Chip Drop fell 2.6%, while Rolling Chip volume decreased 18.4%.

Domestic Operations

Las Vegas Operations

Net revenues from Las Vegas operations, which comprise The Venetian Las Vegas and The Palazzo, were up 3% year over year to $412 million due to a 0.8% rise in casino revenues, a 1.4% increase each in room and food and beverage revenues, along with a 9.8% improvement in convention retail and other revenues.

Adjusted property EBITDA rose 14.4% year over year to $111 million.

However, Table Games Drop fell 14.8% in the quarter.

Sands Bethlehem, PA

Net revenues at Sands Bethlehem were $139 million in the quarter, down 0.7% year over year, attributable to a 0.8% decrease in casino revenues and a 12.5% fall in food and beverage revenues. Rooms, mall and convention, retail and other revenues were flat in the quarter.

Adjusted property EBITDA declined 17.6% year over year to $28 million in the quarter.

Moreover, Table Games Drop were down 7.5%.

2016 Results

Las Vegas Sands’ full-year adjusted earnings of $2.33 missed the Zacks Consensus Estimate of $2.35 by 0.9%. In addition, it declined roughly 7.2% year over year. The downside reflects a decline in revenues.

Full-year net revenue of $11.41 billion missed the Zacks Consensus Estimate of $11.54 billion by 1.2% and declined 2.4% year over year.

Zacks Rank & Stocks to Consider

Las Vegas Sands has a Zacks Rank #3 (Hold). Better-ranked stocks in the sector include Melco Crown Entertainment Limited MPEL, MGM Resorts International MGM and Planet Fitness, Inc. PLNT. While Melco Crown sports a Zacks Rank #1 (Strong Buy), MGM Resorts and Planet Fitness carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Melco Crown posted positive earnings surprises in each of the last four quarters, with an average beat of 102.92%.

MGM Resorts’ earnings surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average beat of 139.40%. Further, for 2016, EPS is expected to grow a momentous 113.3%.

Planet Fitness’ recorded positive earnings surprises in each of the last four quarters, with an average beat of 16.28%. Further, for 2016, EPS is expected to grow 24.3%.

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