MGM MGM Resorts International

Las Vegas Sands Corp. (LVS) recorded adjusted earnings of 54 cents per share in the second quarter of 2011, beating the Zacks Consensus Estimate of 44 cents as well as the year-ago quarter earnings of 17 cents.

On a GAAP basis, the company reported net income of $367.6 million, or 45 cents per share, compared with a loss of $4.7 million, or 1 cent  per share, in the year-ago quarter. The improvement primarily reflects a rise in operating income, partially offset by increases in net income attributable to non-controlling interests (primarily Sands China Ltd.) and income tax expenses.

Quarterly revenues climbed 47.1% year over year to $2.35 billion, outperforming the Zacks Consensus Estimate of $2.20 billion. Consolidated adjusted property EBITDA (earnings before interest, taxes, depreciation and amortization) shot up 90.4% to $901.6 million from the year-ago quarter.

The significant upside in quarterly results was attributable to strong Macau business, outstanding performance of its new resort in Singapore and improved Las Vegas business.   

Macau Businesses

Las Vegas Sands’ integrated resort properties and other assets in Macau are owned and operated by Sands China Ltd., which is a majority-owned subsidiary of the company. Sands China reported a 16.3% year-over-year growth in revenues to $1.21 billion during the quarter.

Revenues increased 26.6% year over year to $735.4 million at The Venetian Macau, while Sands Macau grossed revenues of $331.0 million, up 9.5%. However, revenues at the Four Seasons Hotel Macau and Plaza Casino dropped 16.2% to $120.8 million.

Macau, the only Chinese city where gambling is legal, has survived the economic downturn relatively well. Gaming-friendly policies of the local government have enabled the industry to achieve record earnings.

Average daily rate improved in Venetian Macau, Four Seasons Hotel Macau and Plaza Casino but declined in Sands Macau.

Las Vegas Businesses

Revenues from the Las Vegas operations, which consist of The Venetian Las Vegas and The Palazzo, surged 18.2% year over year to $332.5 million. The company’s Las Vegas business is improving as the company continues to focus on cash revenues to drive visits and is significantly cutting back on compensation allotment and other promotions. Management also remains encouraged as convention bookings continue to improve.

Marina Bay Sands in Singapore

In Singapore, Las Vegas Sands opened Marina Bay Sands in April last year and grossed revenues of $737.6 million during the second quarter of 2011, up 26.1% sequentially. The property has been received well by the market and provides ample opportunity for the company to explore the Asian market. Moreover, the property will attract higher number of tourists with additional high quality non-gaming amenities.

Balance Sheet

At quarter end, the company had $3.48 billion in unrestricted cash balance. Total debt outstanding, including the current portion, was $10.06 billion. The company has scheduled principal payment requirement of $543.0 million for the remainder of 2011.

Our Take

We believe the company is on track to deliver solid results. We remain bullish regarding the growth prospects at Macau and believe that Marina Bay Sands in Singapore will be a significant catalyst for the company. We expect the company’s Asian operations to significantly support its earnings in the coming quarters.

The company reported better-than-expected results; thus estimates are most likely to increase in the coming days. Las Vegas also remains optimistic regarding the introduction of its resort destination on parcels 5 and 6 on the Cotai Strip in 2012, which will further drive visits in Macau.

The company holds a Zacks #2 Rank, which translates into a 'Buy' rating over the short term. We also maintain our long-tern "Neutral" recommendation on the stock.

One of Las Vegas' primary competitors MGM Resorts International (MGM) will report its second quarter earnings on August 8, 2011.

MGM Resorts (NYSE:MGM)
Gráfico Histórico do Ativo
De Jun 2024 até Jul 2024

MGM Resorts (NYSE:MGM)
Gráfico Histórico do Ativo
De Jul 2023 até Jul 2024