Sands execs upbeat despite dip in quarterly earnings

Las Vegas Sands Corp. executives were upbeat Wednesday despite a decline in first-quarter earnings, saying a new Macau property opening in the fall will bring a turnaround.

The company reported net income of $320.2 million, 40 cents a share, on revenue of $2.72 billion for the quarter that ended March 31. That compared with income of $511.9 million, 64 cents a share, on revenue of $3.01 billion for the same quarter a year ago. The company will pay a dividend of 72 cents a share, up from the 65-cent dividend paid a year earlier.

The results failed to meet Wall Street expectations of $2.88 billion in revenue and 62 cents a share, resulting in an after-hours share sell-off.

Late Wednesday, shares fell 6.2 percent to $48.93. But when the market closed, shares were down just 0.3 percent to $52.18 on heavy trading.

Despite the earnings downturn, attributed primarily to the sagging Macau market, company officials said they expect improvement by the end of the year thanks to the opening of the company’s $2.5 billion, 3,000-room Parisian property in about five months.

“I have not a shadow of doubt that the Parisian, which is targeted to open in mid-September, will replicate the success of the Venetian as another themed, iconic and must-see integrated resort destination,” Sands CEO Sheldon Adelson said in the company’s earnings conference call.

“The Parisian will be a themed premium destination,” he said. “Our existing portfolio will clearly enable us to hold our own against new competition and I am extremely confident that we’ll see growth in Macau in the future with the opening of the Parisian.”

With its half-scale replica of the Eiffel Tower as a centerpiece on the Cotai Strip, the Parisian will connect to the company’s Venetian Macau, Plaza Macau, Four Seasons Hotel Macau and Sands Cotai Central with hotels managed by the Conrad, Sheraton and Holiday Inn brands.

The combined properties will have 12,000 rooms and suites and more than 850 stores within four malls under one roof.

Macau’s Eiffel Tower is made of steel instead of the original’s wrought iron and was engineered to withstand the high winds of Macau’s typhoon season.

Sands executives said they are not concerned about Wynn Resorts’ plan to open a new Macau property a few weeks prior to the planned Parisian opening. Wynn Resorts has indicated that Wynn Palace may open in early August.

Each of Sands’ four Macau operating divisions showed declines from the first quarter of 2015, attributed to a falloff of VIP casino play resulting from a crackdown by the Chinese government on corruption throughout the former Portuguese colony. Analysts have said Sands is more susceptible to the crackdown because of its large exposure in Macau, but executives on Wednesday repeated assertions made in their fourth-quarter earnings call that the mass market is rebounding.

In Las Vegas, where the company operates The Venetian and Palazzo properties on the Strip, Sands showed net revenue of $384.9 million compared with $376.4 million in the same quarter a year ago.

The company benefited from a 0.5 percentage-point increase in slot hold, a 5.9 percentage-point increase in occupancy to 92.1 percent and a 2.9 percent increase in the average daily room rate to $231.

The Review-Journal is owned by the family of Las Vegas Sands Chairman and CEO Sheldon Adelson.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Find him on Twitter: @RickVelotta