It has been about a month since the last earnings report for Las Vegas Sands (LVS). Shares have lost about 13.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Las Vegas Sands due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Las Vegas Sands Q2 Earnings & Revenues Miss Estimates
Las Vegas Sands reported second-quarter 2019 results, wherein both earnings and revenues missed the Zacks Consensus Estimate, after delivering a beat in the preceding quarter. Adjusted earnings came in at 72 cents per share, which declined 2.7% year over year and missed the Zacks Consensus Estimate of 81 cents. The bottom line was impacted by higher interest expenses. In the quarter, interest expense, net of amounts capitalized, increased to $143 million compared with $93 million in the year-ago quarter.
Net revenues totaled $3,334 million, which lagged the consensus mark of $3,424 million but improved 0.9% on a year-over-year basis. Top-line growth was primarily driven by increased revenues at casino, rooms, mall as well as Food and beverage. The company also generated solid revenues from Las Vegas operation.
Furthermore, the company completed the sale of Sands Bethlehem in the quarter under review.
Las Vegas Sands’ Asia business includes the following resorts:
The Venetian Macao
Net revenues increased 2.9% year over year to $854 million on a 3.1% rise in casino revenues, 10.7% growth in malls revenues and 1.9% improvement in rooms revenues. However, revenues from convention, retail and other as well as food and beverage declined 11.1% and 5.6%, respectively.
Adjusted property EBITDA rose 1.5% year over year to $336 million in the quarter under review.
Non-rolling chip drop increased 4.5%, whereas rolling chip volume declined 13.7%.
Sands Cotai Central
Net revenues decreased 5.1% year over year to $483 million owing to a 7.3% decline in casino revenues and 1.3% fall in rooms revenues. In the meantime, food and beverage, mall as well as convention, retail and other revenues rose 4.3%, 6.7% and 14.3%, respectively, on a year-over-year basis.
Adjusted property EBITDA was $165 million, down 6.3% year over year.
Both non-rolling chip drop and rolling chip volume declined 0.5% and 50.9%, respectively.
The Parisian Macao
Revenues amounted to $414 million, mirroring an 11.6% increase year over year. The upside can be mainly attributed to an 11.4% rise in casino revenues, 6.3% surge in food and beverage as well as a 14.3% rise in rooms revenues. However, mall revenues remained flat year over year.
Adjusted property EBITDA improved 21.9% year over year to $139 million.
Non-rolling chip drop improved 7.5%, while rolling chip volume declined 7.4%.
The Plaza Macao and Four Seasons Hotel Macao
Net revenues jumped 13.4% to $211 million on a 19.1% increase in casino revenues, 11.1% gain in rooms revenues, and a 12.5% increase in food and beverage revenues. Nevertheless, revenues from rooms, and food and beverage remained flat year over year. Revenues from mall declined 6.1% year over year.
Adjusted property EBITDA jumped 15.3% to $83 million.
Rolling chip volume increased 22.2% while non-rolling chip drop rose 4.1%.
Revenues were down 13.9% year over year to $155 million on account of a 15.1% decline in casino revenues.
Adjusted property EBITDA declined 17.3% to $43 million.
While rolling chip volume declined 8.2%, non-rolling chip drop increased 6.1%.
Marina Bay Sands, Singapore
Net revenues fell 2.4% year over year to $688 million due to a 5.3% decline in casino revenues. On the flip side, convention, retail and other revenues as well as food and feverage revenues rose 8% and 13.7%, respectively. Mall revenues were flat year over year.
Adjusted property EBITDA of $346 million in the second quarter decreased 6%.
Non-rolling chip drop declined 10.2%, whereas rolling chip volume rose 22.6%.
Net revenues from Las Vegas operations, which comprise The Venetian Las Vegas and The Palazzo including the Sands Expo and Convention Center, increased 15.9% to $466 million on an 86.7% and 5.9% rise in casino revenues, and convention, retail and other revenues, respectively. Rooms revenues also increased 4.7%. However, food and beverage revenues fell 1.1% year over year.
Adjusted property EBITDA in the quarter totaled $136 million, which surged 76.6% on a year-over-year basis.
Table games drop surged 50.3%, while slot handle rose 4.2%.
On May 31, 2019, the company completed the sale of Sands Bethlehem for $1.16 billion net cash proceeds, before transaction costs and state income taxes. The company realized a gain on the sale of $556 million.
In the sixty-day period (ended May 30, 2019) the Sands Bethlehem generated revenues of $90 million.
On a consolidated basis, adjusted property EBITDA rose 3.3% year over year to $1.27 billion in the second quarter. The upside can be attributed to increase in adjusted EBITDA from the The Venetian Macao, The Parisian Macao, The Plaza Macao and Four Seasons Hotel Macao and Las Vegas Operating Properties.
Adjusted net income decreased 5.6% year over year to $555 million.
As of Jun 30, 2019, unrestricted cash balances amounted to $4.02 billion. Total debt outstanding (excluding finance leases) summed $12 billion.
In the reported quarter, capital expenditures totaled $213 million. This was mainly due to construction, development and maintenance activities of $99 million in Macao, $49 million at Marina Bay Sands and $65 million in Las Vegas.
Quarterly dividend paid by the company was 77 cents per share, while it repurchased $180 million of its common stock.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -5.97% due to these changes.
Currently, Las Vegas Sands has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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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