Booming business at its three resorts in Macau helped Las Vegas Sands Corp. salvage its second-quarter earnings. But initial results from the company's newly opened $5.7 billion complex in Singapore could foretell the future.
Las Vegas Sands told investors Wednesday its net loss of $4.7 million, or 1 cent per share for the quarter that ended on June 30, shrunk considerably compared to a year ago, when the company lost $222.2 million, or 34 cents per share.
Analysts polled by FactSet Research thought Las Vegas Sands would earn 9 cents per share in the quarter.
Companywide revenues grew 51 percent to $1.59 billion. However, Las Vegas Sands said revenues produced by the Venetian Macau, Sands Macau and Four Seasons Macau increased 40.7 percent to $1.04 billion in the quarter, compared to $738.9 million in the second quarter of 2009.
Meanwhile, the company's Marina Bay Sands in Singapore, which opened April 27, generated $94.5 million in cash flow in its first 65 days.
"With property performance better than our expectations in Macau and Singapore, and with the Las Vegas Strip weaker than expected, we believe Asia will be the key driver of the story, and the report is bullish for the shares," Jefferies and Co. gaming analyst David Katz told investors in a research note.
Las Vegas Sands Chairman and Chief Executive Officer Sheldon Adelson said he expects Marina Bay Sands to have more than $1 billion in cash flow next year because the property has expanded its initial customer base.
"There are so many people that are coming from different countries in Asia, I think that the outer reaches of our marketing radius is wider than what we thought before," Adelson said. "Both gaming volumes and visitation to the property have been robust and we are gratified by the overwhelming reception the property has received."
JP Morgan gaming analyst Joe Greff said the initial numbers from the Marina Bay Sands were impressive. Singapore has only two casinos.
"These are pretty strong results for a property that was only open 65 days in the quarter, without a lot of nongaming amenities to support gamers and reflective of an attractive duopolistic market located in a financial hub in Asia with a low gaming tax rate," Greff told investors.
Deutsche Bank gaming analyst Chris Woronka said the early results from Singapore should boost investors' spirits.
"Particularly encouraging was the margin result at Marina Bay Sands during its first partial quarter of operations," Woronka wrote in a research report. "This should boost investor confidence in what some had viewed to be lofty long-term earnings expectations at the property."
Earlier this year, Las Vegas Sands said it was planning to restart construction on its stalled development projects on the Cotai Strip region of Macau, where building was halted in November 2008.
The company plans to open 6,400 additional hotel rooms under the Shangri-La, Traders, Sheraton, Sheraton Towers and St. Regis brands, adding additional convention and casino space.
With Macau and Singapore as the company's highlights, Las Vegas Sands' two Strip resorts showed some small signs of recovery.
Net revenues at The Venetian and Palazzo declined 5.4 percent to $276.2 million during the second quarter, but the resorts reported increased gaming volumes, improved group booking volumes and improved hotel occupancy during the three-month period. However, results were hurt by low table games win percentage.
"Las Vegas results came in slightly below our expectations, though low hold played a factor," Hudson Securities gaming analyst Robert LaFleur said. "All-in, the (company's) results were solid, driven by strong performances in Macau."
Shares of Las Vegas Sands closed at $26.69 on the New York Stock Exchange on Wednesday, up $1.41, or 5.58 percent.
Contact reporter Howard Stutz at firstname.lastname@example.org or 702-477-3871.