Las Vegas Sands Corp. shrugged off the declining Macau gaming market during the third quarter, saying Wednesday that companywide net income increased 7.2 percent.
The earnings announcement comes as Macau has suffered through four straight monthly gaming revenue declines.
Most analysts expect the market to show a fifth straight decrease in October, following a less-than-impressive Golden Week holiday.
Still, Las Vegas Sands Chairman Sheldon Adelson was undeterred.
Las Vegas Sands said its total company revenue was $3.53 billion in the quarter that ended Sept. 30, compared with $3.57 billion a year ago, a 1.1 percent decline.
In Macau, where the company operates four resort destinations and is building a $2.7 billion Paris-themed development, revenue fell less than 1 percent to $2.33 billion in the quarter.
“As I have said in the past, all things in life are cyclical,” Adelson said on a conference call with analysts. “We have experienced cyclicality in Macau in the past, and we believe that the current softness in the environment in Macau today is also cyclical, and that it is only a matter of time before the cycle reverses itself.”
Las Vegas Sands told investors its net income for the third quarter was $671.7 million, compared with $626.7 million in the same quarter a year ago. Earnings per share increased 9.2 percent to 83 cents per share from 76 cents per share a year earlier.
“The important point is that our strategy hasn’t changed,” Adelson said. “Our business will continue to be anchored around the mass market, and the secular growth of Chinese tourism.”
MORE SLIPPAGE SEEN IN MACAU
In Macau, gaming revenue fell in September 11.7 percent, the worst percentage gaming revenue decline in five years. Market watchers are predicting a decline of more than 20 percent in October.
Several gaming analysts lowered their target stock prices on Macau casino operators, including Las Vegas Sands, because of projected revenue declines.
UBS gaming analyst Robin Farley told investors that Macau’s annual gaming revenue total would end the year flat compared with 2013’s record $45.2 billion. Farley predicted October gaming revenue will be down 16 percent to 22 percent in October and down between 14 percent and 19 percent in November and December.
In a talk at the Global Gaming Expo this month, Adelson said he thought Macau’s high-end gaming business would recover in two months once the government’s crackdown on corruption subsides.
On Wednesday, he told analysts it might be the second quarter of 2015 before the high-end business returns to Macau because there have been conflicting reports on the government’s corruption campaign.
“Notwithstanding the recent cyclicality in Macau, I am as confident today as I have ever been in the long-term future of our company,” Adelson said. “This confidence is not based on whimsical fancy, but is founded on the company’s sustainable strategic advantages.”
SOME REVENUE INCREASES
In Las Vegas, The Venetian and Palazzo hotel-casinos reported net revenue of $380.5 million, an increase of 1.4 percent. The company’s Marina Bay Sands resort in Singapore reported net revenue of $735.5 million, a 5 percent decline from a year ago.
Sands Bethlehem in Pennsylvania reported third-quarter revenue of $127.3 million, an 3.6 percent increase.
During the third quarter, Las Vegas Sands returned $299.8 million to shareholders through a $2 billion stock repurchasing program.
The board also increased its recurring common stock dividend for 2015 to $2.60 per share.
“The confidence we have in the strength of our business and the reliability and predictability of our cash flows have allowed us to progressively increase the return of capital to shareholders,” Adelson said.
Adelson and his family own roughly 53 percent of Las Vegas Sands’ outstanding shares.
Adelson said the company is moving forward on potential gaming opportunities in Japan, Korea and Vietnam.
“Financially, we have the wherewithal to pursue developments in all three of these jurisdictions concurrently, if the opportunity to do so arises,” Adelson said.
In after-hours trading, Las Vegas Sands shares were up $1.08, or 1.79 percent, to $61.40 on the New York Stock Exchange. The company ended the regular session up 71 cents, or 1.19 percent, at $60.32.
Contact reporter Howard Stutz at email@example.com or 702-477-3871. Follow @howardstutz on Twitter.