In the category of random action after an earnings report, casino operator Las Vegas Sands (LVS) reported a 12 cent beat versus analysts expectations but has not been rewarded as of yet with the stock slightly off. As long time readers know, the company name is now a misnomer as this is a global (read: Asian) influenced company with Las Vegas being a smaller and smaller piece of the business as each year passes. Looks like Europe is up next with the next casino(s) in Spain. Don't laugh – despite the near term awful economy, Spain – due to weather- is much like Italy a center of tourism for the continent. This quarter even saw decent metrics out of the U.S. – a major bonus.
Revenue was up 39% and EPS came in at 70 cents – both numbers soundly beat estimates, as Singapore came on strong.
- Las Vegas Sands' continued to rake in winnings in the first quarter, led by growth in Singapore and gaming mecca Macau. Earnings for the casino resorts giant climbed 89% to 70 cents per share, topping analyst estimates by 10 cents.
- Revenue jumped 31% to $2.76 billion, vs. Wall Street projections of $2.62 billion.
- Sands CEO Sheldon Adelson said Q1's gains came in large measure on strength in Macau and Singapore, where the company also has operations. "Our business in Macau has never been in a stronger position," Adelson said during a press conference. "The word plateau in terms of Asia is not in our vocabulary.
- Morningstar analyst Chad Mollman said, "They put in new management for Sands China, and the new promoters are bringing in VIP customers there.
- Sands grew in all geographic markets, with a slowly improving U.S. economy another boon. Las Vegas Sands on April 11 opened the Sands Cotai, its newest Macau resort casino.
- Sands China, which includes its three Macau casinos open during Q1, reported a 25% revenue gain to $1.45 billion.
- Revenue at Marina Bay Sands in Singapore surged 45% to $848.7 million.
- In the U.S., the Las Vegas Sands casino enjoyed a 26% rise to $384.6 million. Revenue at Sands Bethlehem in Pennsylvania grew 27% to $115.6 million.
- Sands credited baccarat with increasing the amount its customers gambled in Las Vegas. The amount wagered at its Palazzo and Venetian resorts rose 27.8% to $609 million, and Sands won a higher amount from those wagers than it did during the same quarter one year ago. The 91% jump in gambling revenue made up for more spending on freebies for players, a drop in food and beverage revenue and an increase of less than 1 percent in room revenue.
- Sands said its board declared a cash dividend of 25 cents per share, to be paid June 29 to those holding shares June 20.
- Adelson earlier this month also revealed plans to build a $35 billion Vegas-style strip in Spain. On Wednesday he clarified his remarks, saying Sands would invest about $4 billion over three years either in Madrid or Barcelona. Revenue from the initial phase would finance further expansion, so total estimated out-of-pocket investment would be $4 billion to $5 billion. Adelson said a decision as to Barcelona or Madrid is expected in a matter of weeks.
- The project would call for four casino-resorts built over 9 years at a cost of $2 billion to $3 billion each, Adelson said.
Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund's holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog