Las Vegas Sands execs optimistic about Strip

Las Vegas Sands Corp. narrowed its loss in the first quarter, helped by strong revenue increases in Macau, the company said Thursday.

The company was upbeat about Las Vegas for the first time in a while, able to improve year-to-year results with a record table drop. Rooms rates at The Venetian and Palazzo on the Strip have been rising the past six weeks.

The company lost $28.9 million, or 4 cents per share, for the quarter ended March 31, a sharp improvement from the loss of $80.9 million, or 12 cents per share, it had in the first three months of last year.

Net revenue rose 23.1 percent, to $1.33 billion from $1.08 billion.

Analysts polled by Thomson Reuters expected Las Vegas Sands to earn 2 cents per share on revenue of $1.31 billion.

Cash flow, defined as earnings before interest, taxes, depreciation and amortization, jumped 42.7 percent, to $371 million from $260 million the same time last year.

"We are pleased to report that we delivered record revenues and adjusted (cash flow) during the first quarter," Las Vegas Sands Chairman and Chief Executive Officer Sheldon Adelson said.

Net revenue jumped 26.5 percent to $283.8 million and cash flow 38.5 percent to $69.8 million at the Sands Macau. The Venetian Macau saw revenue increase 13.6 percent to $549.7 million and cash flow increase 39.8 percent to $169.9 million. At the smaller Four Seasons Macau, revenues jumped 117.7 percent to $102.3 million and cash flow climbed 343.2 percent to $19.5 million.

Sands is preparing to restart construction on two projects in Macau, known as sites 5 and 6, which are scheduled to open in 2011.

In Las Vegas, Executive Vice President Rob Goldstein said the Strip casinos realized a record table-game drop of $547 million, a 23 percent increase from last year. The increase pushed casino revenues up 19.6 percent to $155.3 million.

Room rates, however, continued to slip slightly in the first quarter, pushed down by depressed rates by Strip competitors, even though inventory demand from free and leisure travelers and group business was better than expected.

"Our gaming business (in Las Vegas) is healthy with record numbers in our most recent quarter, while our costs our down," said Goldstein, who is president of The Venetian and Palazzo. "Given that backdrop, we're confident the Las Vegas properties will continue to exhibit significant property leverage as price in the fit and group segment improves."

The 4,027-room Venetian had an occupancy rate of 89.3 percent the first three months, while the 3,066-room Palazzo had 94 percent occupancy.

Average daily room rates slipped 3.3 percent to $202 at The Venetian and 3.2 percent to $214 at the Palazzo.

Group travel seems to be returning, with 515,000 rooms booked by that sector through 2010, 9.6 percent more than the 470,000 booked in all of 2009, Goldstein said.

Recently, weekend rates and leisure travelers have been trending up, he said.

Adelson said room rates in Las Vegas have been averaging between $240 and $260 on weekends since the second quarter began.

"We've got a ways to go in Las Vegas, but I am a little more optimistic than I was the last six months," Goldstein said. "I do see some positive leisure trends. Clearly demand on the group side is very strong but the rates haven't been as strong."

The $5.7 billion Marina Bay Sands in Singapore opened after the quarter and does not figure into these results.

The company also owns a casino in Pennsylvania with plans to add a 300-room hotel there.

Contact reporter Arnold M. Knightly at aknightly @reviewjournal.com or 702-477-3893.