Driven by Macau, Las Vegas Sands Corp.’s earnings rise 36 percent
Las Vegas Sands Corp. grew profits 36 percent in the first quarter, driven by the success of the company’s casino holdings in Macau.
In response to a conference call question from an analyst, Chairman Sheldon Adelson said there is no reason to believe the market — China’s only legal gambling jurisdiction — will slow down anytime soon.
Investors have worried over the past few months that visitation to Macau might diminish over Chinese economic concerns. Adelson said, “The Chinese and other Asian peoples have been wanting to challenge luck for 3,000 years.”
He said that philosophy won’t change — and the numbers back up his assertion.
The company, which reported results Thursday for the period that ended March 31, said $2.02 billion of its $4.01 billion of quarterly revenue came from Macau.
Adelson said the company’s Macau casinos grew in every market segment. Mass-market tables games, for example, increased revenues 40 percent more than all of Macau as a whole.
“Where does supply cross demand? I don’t know, and I’m a pretty smart guy,” Adelson said.
Las Vegas Sands is also moving forward with expansion plans in Macau. The 3,000-room Parisian and a 600-room St. Regis Hotel tower at Sands Cotai Central will give the company “13,000 rooms under one roof” on Cotai.
“There is nothing else like it in the world,” Adelson said.
Las Vegas Sands was the first American company to open a casino in Macau in 2003. Today, the enclave is the world’s largest gaming market, producing a record $45.2 billion in gaming revenue in 2013.
For the quarter, which ended March 31, Las Vegas Sands said its net income increased 35.7 percent to $776.2 million. Earnings per share increased 37.7 percent 95 cents per share. Analysts polled by FactSet predicted a profit of 92 cents per share.
The company’s single-quarter record of $4.01 billion in revenue was an increase of 21.4 percent over the 2013 first quarter.
Adelson took credit for creating the idea of the Cotai Strip. In addition to the company’s $2.7 billion Parisian, MGM Resorts International and Wynn Resorts Ltd. are building resort complexes on Cotai.
“It was my vision. I created the Cotai Strip,” Adelson said. “Today, everybody will cut off their right arm to get a piece of land on Cotai.”
He said the company might approach Macau about adding a 2,500-room to 3,000-room hotel-casino on Cotai next to the planned Tropical Gardens property after the Parisian opens in 2016.
Las Vegas Sands also operates the Venetian and Palazzo on the Strip, the Marina Bay Sands in Singapore and the Sands Bethlehem in Pennsylvania.
The Marina Bay Sands grew revenue 5.1 percent in the quarter to $835.4 million, while the U.S. markets experienced revenue decreases. On the Strip, the Venetian and Palazzo saw revenue decline 7 percent to $382.7 million and Sands Bethlehem was off 4.7 percent to $117.2 million.
Despite the revenue decline in Las Vegas, the company said there were some positive signs in the market.
The average daily hotel room rate at The Venetian and Palazzo was $241, the highest figure since the second quarter of 2008 and a 14.2 percent increase over the 2013 first quarter. Revenue per available room, a nontraditional reporting measure, increased 12 percent to $214.
The amount wagered by customers on table games increased 2.4 percent to $518.5 million, which reflected strong baccarat play. However, slot machine wagering decreased 4.4 percent to $473.2 million.
Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Follow @howardstutz on Twitter.
