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Why Is Las Vegas Sands (LVS) Down 4.2% Since Last Earnings Report?

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A month has gone by since the last earnings report for Las Vegas Sands (LVS). Shares have lost about 4.2% in that time frame, outperforming 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 drivers.

Las Vegas Sands Q1 Earnings & Revenues Miss Estimates

Las Vegas Sands reported dismal first-quarter 2022 results, with earnings and revenues missing the Zacks Consensus Estimate. The top and the bottom line declined on a year-over-year basis. The downside was mainly caused by reduced visitation and pandemic-related travel restrictions in Macao and Singapore.

Earnings & Revenue Discussion

During first-quarter 2022, the company reported an adjusted loss per share of 40 cents, wider than the Zacks Consensus Estimate of a loss of 24 cents. In the prior-year quarter, the company had reported an adjusted loss of 25 cents per share. During the quarter under review, interest expenses (net of amounts capitalized) amounted to $156 million compared with $154 million reported in the prior-year quarter.

Quarterly revenues of $943 million missed the consensus mark of $1,142 million by 17.4%. Also, the figure declined 21.2% from $1,196 million reported in the prior-year quarter.

Asian Operations

Las Vegas Sands’ Asia business includes the following resorts:

The Venetian Macao

During the first quarter of 2022, net revenues from Venetian Macao were $227 million compared with $340 million reported in the prior-year quarter. The downside was caused by a decline in casino, rooms and mall revenues.

During the quarter, revenues from casino, rooms and malls were $157 million, $16 million, and $44 million compared with $266 million, $19 million, and $46 million, respectively, in the prior-year quarter. Convention, Retail and Other revenues were $4 million compared with $3 million reported in the year-ago quarter. Food and beverage revenues came in at $6 million, in line with the prior-year quarter’s levels.
 
Adjusted property EBITDA during the first quarter totaled $19 million compared with $82 million reported in the prior-year quarter.

Non-rolling chip drop and rolling chip volumes were $636 million and $720 million, respectively, compared with $908 million and $1,231 million reported in the prior-year quarter.

During the quarter under review, the segment’s hotel RevPAR was $65 million compared with $74 million reported in the prior-year quarter. Occupancy rates came in at 42.7% compared with 47.2% in the prior-year quarter.

The Londoner Macao

During the first quarter, net revenues from The Londoner Macao amounted to $121 million compared with $137 million reported in the prior-year quarter. The downside was primarily caused by a fall in casino and convention, retail and other revenues.

During the quarter, revenues from casino and convention, retail and other totaled $79 million and $1 million compared with $91 million and $6 million, respectively, reported in the prior-year quarter. Food and beverage revenues were $8 million in the reported quarter compared with $7 million in the prior-year quarter. Rooms and mall revenues came in at $19 million and $14 million, respectively, in line with the prior-year quarter levels.

Adjusted property EBITDA in the reported quarter totaled ($33) million compared with ($23) million in the prior-year quarter.

Non-rolling chip drop volumes were $354 million compared with $408 million in the prior-year quarter. Rolling chip drop volumes during the quarter were $369 million compared with $523 million reported in the prior-year quarter

During the quarter, the segment’s hotel RevPAR was $43 million compared with $61 million reported in the prior-year quarter. Occupancy rates came in at 28% compared with 35.5% in the prior-year quarter.

The Parisian Macao

During the first quarter, net revenues from The Parisian Macao were $74 million compared with $87 million reported in the prior-year quarter. The downside was primarily due to a decline in casino, rooms, food and beverage and mall revenues.

During the quarter, revenues from casino, rooms, food and beverage and mall totaled $51 million, $11 million, $3 million and $8 million compared with $59 million, $12 million, $5 million and $10 million, respectively, in the prior-year quarter.
 
Non-rolling chip drop volumes were $180 million compared with $300 million reported in the prior-year quarter. Meanwhile, rolling chip drop volumes amounted to $160 million compared with $114 million in the year-ago quarter.

The segment’s hotel RevPAR was $49 million compared with $55 million reported in the prior-year quarter. Occupancy rates came in at 41.3% compared with 46.7% in the prior-year quarter.

The Plaza Macao and Four Seasons Macao

During the first quarter, net revenues from The Plaza Macao and Four Seasons Macao were $102 million compared with $170 million reported in the prior-year quarter. The downside can be attributed to a fall in casino, rooms and mall revenues.

During the quarter, casino, rooms and mall revenues came in at $55 million, $9 million and $34 million compared with $115 million, $11 million and $39 million, respectively, in the prior-year quarter.

Adjusted property EBITDA in the reported quarter totaled $32 million compared with $70 million reported in the prior-year quarter.

Both non-rolling chip drop and rolling chip volumes were $215 million and $574 million compared with $256 million and $1,436 million reported in the prior-year quarter.

In the quarter under review, the segment’s hotel RevPAR was $157 million compared with $189 million reported in the year-ago quarter. Meanwhile, occupancy rates came in at 35.8% compared with 43.7% in the prior-year quarter.

Sands Macao

During the first quarter, net revenues from Sands Macao were $20 million compared with $35 million reported in the prior-year quarter. The downside was primarily due to a decline in casino revenues. In the quarter under review, casino revenues totaled $17 million compared with $31 million reported in the prior-year quarter.

Adjusted property EBITDA in the first quarter totaled ($17) million compared with ($18) million reported in the prior-year quarter.

Non-rolling chip drop and rolling chip volumes were $77 million and $80 million, respectively, compared with $122 million and $484 million reported in the prior-year quarter.

During the quarter under review, the segment’s hotel RevPAR was $78 million compared with $99 million in the year-ago quarter. Occupancy rates came in at 57.1% compared with 71.5% in the prior-year quarter.

Marina Bay Sands, Singapore

During the first quarter, net revenues from Marina Bay Sands totaled $399 million compared with $426 million reported in the prior-year quarter. The downside was mainly due to a fall in casino and food and beverage revenues.

During the quarter under review, revenues from casinos and food and beverage totaled $268 million and $31 million compared with $303 million and $33 million reported in the prior-year quarter. Revenues from rooms, mall, convention, retail and other came in at $38 million, $49 million and $13 million compared with $32 million, $47 million and $11 million reported in the prior-year quarter.

Adjusted property EBITDA in the reported quarter totaled $121 million compared with $144 million reported in the year-ago quarter.

Non-rolling chip drop and rolling chip volumes were $795 million and $1,899 million, respectively, compared with $674 million and $1,512 million reported in the prior-year quarter.

In the quarter under review, the segment’s hotel RevPAR was $215 million compared with $143 million reported in the prior-year quarter. Occupancy rates came in at 83.8% compared with 63% in the prior-year quarter.

Domestic Operations

Las Vegas

On Feb 23, 2022, the company closed the sale of its Las Vegas Operating Properties and has classified it as a discontinued operation.

For the 53-day period (ended Feb 22, 2022), net revenues from Las Vegas operations came in at $228 million. Adjusted property EBITDA during the period totaled $63 million. RevPAR during the period was $209 million, while occupancy rates came in at 84.6%.

Operating Results

On a consolidated basis, adjusted property EBITDA totaled $110 million in the first quarter of 2022, compared with $244 million reported in the prior-year quarter.

Balance Sheet

As of Mar 31, 2022, unrestricted cash balances amounted to $6.43 billion compared with $1.85 billion in the previous quarter. Total debt outstanding (excluding finance leases and financed purchases) was $14.95 billion compared with $14.77 billion as of Dec 31, 2021.

In the reported quarter, capital expenditures totaled $137 million, thanks to construction, development and maintenance activities of $84 million in Macao and $50 million at Marina Bay Sands.

 

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

The consensus estimate has shifted -220% due to these changes.

VGM Scores

At this time, Las Vegas Sands has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, 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.

Outlook

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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