Las Vegas Sands Posts $367.6M Profit in Second Quarter
By Associated Press
LAS VEGAS — Casino-resort operator Las Vegas Sands Corp. said Tuesday that it earned $367.6 million for the second quarter, reversing a loss of $4.7 million a year earlier as its revenue rose almost 50 percent.
The company led by billionaire Sheldon Adelson said its results in Las Vegas improved as the company focused on attracting conventioneers and other business travelers and curbed spending on freebies to attract gamblers to slot machines and table games. At the Venetian and Palazzo casinos in Las Vegas, gambling revenue rose just 2.2 percent to $105.1 million as the company cut its promotional allowances nearly 60 percent.
Most of Sands’ $2.35 billion in revenue — and most of the increase — came in Macau, where it took in $1.21 billion. The company’s revenue in Singapore was $737.6 million. In Las Vegas, where the company is based, revenue rose 18.2 percent to $332.5 million.
Labeling the quarter “historic,” Adelson told investors during a conference call that Sands has increased its earnings before taxes and other items for eight straight quarters, and he thinks the run can continue.
“As the only operator with a presence in the world’s two most lucrative gaming markets — Macau and Singapore — we see absolutely no reason, no catalyst at hand which would change this upward trend,” Adelson said.
Adelson said he thinks Singapore will continue getting more word-of-mouth buzz as an overall destination for leisure and business tourism, leading to even more visitors.
“Nobody can convince me that we’ve even touched the area of saturation of the market,” Adelson said. “I think Singapore’s going to continue to grow and grow and grow.”
Sands said Marina Bay Sands in Singapore is on its way to becoming the most profitable casino-resort ever. It opened last year.
Sands said its adjusted earnings were $438.6 million, or 54 cents per share, for the period that ended June 30. That beat analysts’ average forecast for adjusted profit of 43 cents per share. Analysts expected revenue of $2.2 billion.
Sands revenue in the same period last year was $1.59 billion.
Sands China, the subsidiary that runs the company’s casinos in Macau, doubled its net income to $267.4 million, compared with $133.6 million during the same period last year.
Michael Leven, Sands’ chief operating officer, said the company was on its way toward opening additional resorts in Macau’s Cotai area that would add more than 6,000 rooms in phased openings starting in the first quarter next year and going through early 2013. Macau is the only area in China where gambling is legal.
Analyst David Bain of Sterne Agee & Leach, Inc., said in a note to clients Sands released its earnings report that the potential for growth in Asia would lead investors to push up the price of Sands shares.
He said they trade at lower prices than those of competitors Wynn Resorts Ltd. and MGM Resorts International, considering the company’s earnings before taxes, depreciation, interest and amortization.
Sands has most of the Cotai market, where most of Macau’s future growth with come, and it has opportunities in Singapore that competitors do not, Bain said.
Sands said revenue at its Sands Bethlehem in Pennsylvania rose 41.5 percent to $97.1 million.
Shares of Sands rose $2.49, or 5.4 percent, to $48.79 in aftermarket trading on Tuesday. They had closed at $46.30, up less than one percent.
