Las Vegas Sands 3Q revenue drops, profit grows
LAS VEGAS (AP) — International gambling destination Macau continued to pose a challenge for casino giant Las Vegas Sands Corp. in the third quarter. But as high-roller gamblers eased back there, other gamblers shelled out at the company's Marina Bay Sands resort in Singapore where the casino's daily take climbed almost 7 percent to $4.8 million.
The company also pointed to increased spending on entertainment, retail shops and hotel rooms beyond the casino floors.
The company's quarterly profit increased 7.2 percent due to a focus in part on non-gambling revenue despite overall revenue dropping 1 percent to $3.53 billion in the same three months.
Sheldon Adelson, the company's CEO and chairman, remained bullish on Macau and expansions into other Asian gambling markets during a conference call with investors and analysts Wednesday.
"All things in life are cyclical," Adelson said, adding that it was only a matter of time before Macau turned around again. He called the Chinese market "under-penetrated."
Corruption investigations into the gambling industry there — including into VIP junket services that infuse casinos with high-roller gamblers — plus protests by Hong Kong citizens, have had an effect on resorts doing business in Macau.
Alex Bumazhny, a director with Fitch Ratings focused on gambling, lodging and leisure industries, said he expected to see weaker results from the company because of Macau's performance the past few months. But the win-rate at the Las Vegas Sands' table games proved less volatile than it can be with the usual crop of high-rollers that weren't in abundance recently, he said.
He said the company made a good case for being popular with regular gamblers versus the high-rollers that come with steep competition from other casinos in the region.
"They're in a pretty good position we feel in Macau," he said.
The company is still moving forward with its Parisian Macau resort that Adelson said he expected to open, partially by late 2015 and fully by early 2016.
The billionaire casino owner reiterated his interested in investing substantial capital in Japan and Korea, and said Vietnam also has potential. He said Las Vegas Sands had the financial wherewithal to pursue projects in all three countries if the opportunity arose.
Adelson, though, said he wouldn't be interested in developing any casino resorts, "in Japan or any other country" if regulations there required the properties serve foreign customers only.
Adelson also dismissed any impact a new smoking regulation in Macau has had on business. Casinos now have non-smoking areas. He said some customers may "grumble" about having to move to gambling rooms that allow smoking, but they do it.
Little was said of Las Vegas during the call, but revenue from the hotel rooms at The Venetian and The Palazzo as well as shopping and convention-related business at the Sands Expo and Convention Center boosted revenue 1.5 percent. Casino revenue dropped 1.8 percent to $165 million in the third quarter from $168 million a year ago.
Overall company net income increased to $671.7 million, or 83 cents a share, from $626.7 million a year prior.
The company didn't beat analyst expectations, though.
For the quarter ended in September, analysts thought Las Vegas Sands would earn 84 cents per share excluding any special charges or gains and revenue was expected to total $3.68 billion, according to FactSet.
Shares of Las Vegas Sands added $1.08, or 1.8 percent, to $61.40 in after-hours trading.