Las Vegas Sands reverses last year’s third quarter loss

Las Vegas Sands Corp. executives took what amounted to a victory lap Wednesday.

Earlier this year, company Chairman Sheldon Adelson told analysts and investors that by 2011, the casino operator would reach $3 billion in cash flow -- referred to in financial statements as earnings before interest, taxes, depreciation and amortization.

He said Wednesday he was wrong.

"Looking at our results from the first 25 days of October, our annualized run rate is now substantially in excess of $3 billion," Adelson said during a conference call discussing the company's third-quarter earnings.

Thanks to booming results from Macau and at the company's newly opened $5.7 billion resort in Singapore, Las Vegas Sands reversed a net loss from a year ago. The casino operator, which owns The Venetian and Palazzo on the Strip, said its net income for the period that ended Sept. 30 was $168 million, or earnings of 21 cents per share. A year ago, Las Vegas Sands lost $123 million, or 19 cents per share.

Analysts surveyed by FactSet Research had forecast earnings of 23 cents a share.

Adelson said the company's total cash flow of $645 million in the quarter was the gaming industry's highest figure since late 2006.

Net revenue for the third quarter was $1.91 billion for Las Vegas Sands, an increase of 67.3 percent compared to $1.14 billion in the third quarter of 2009.

"Strong revenue growth and increases in operational efficiency in Macau and outstanding results at Marina Bay Sands in Singapore contributed to substantial margin expansion and industry-leading financial performance overall," Adelson said.

The quarterly results were announced following the close of trading on the New York Stock Exchange where shares of the company finished the day at $41.06 a share, up 6 cents, or 0.15 percent. The news sent shares of Las Vegas Sands soaring more than $4 a share, or up 11 percent, in after-hours trading.

In Singapore, the Marina Bay Sands, which opened in April, produced cash flow of $241.6 million and had total net revenues of $485.9 million. The property is one of just two casinos operating in Singapore.

In a statement, the company said Marina Bay's average daily adjusted cash flow increased 275 percent between May and October.

"These results are particularly impressive considering we are still in the very early stages," Adelson said. "Looking ahead, we are confident that Marina Bay Sands will provide an ideal platform for strong growth and outstanding returns for our company."

Hudson Securities gaming analyst Robert LaFleur said his biggest question going into the earnings announcement was how large the market was going to be in Singapore. The results covered Las Vegas Sands' first full quarter of operations at the Marina Bay Sands.

"Two weeks ago, we raised our estimates and price target for Las Vegas Sands on continued strength in Singapore and Macau," LaFleur told investors. "We remain comfortable with that move and we continue to believe that Las Vegas Sands is the best way to play the explosive growth of gaming in Asia."

LaFleur said the company is also well positioned to benefit from the introduction of gaming into any major new future Asian jurisdictions.

In Macau, Las Vegas Sands' three resorts reported total revenues of $1.08 billion, an increase of 27.7 percent compared with $846 million a year ago.

In Las Vegas, the company's two casinos reported net revenues of $290.7 million, an increase of 26.9 percent compared to a year ago. Las Vegas Sands said increases in gaming volumes and hotel revenues contributed to $58.3 million of adjusted property cash flow during the quarter.

KDP Investment Advisors gaming analyst Barbara Cappaert said The Venetian and Palazzo should begin to see some increases in hotel room rates and occupancy levels as group business in Las Vegas continues to grow. However, Macau and Singapore will continue to drive the company's results.

"The domestic recovery will certainly be eclipsed by the Asian operations," Cappaert said. "The question will be, how much will Las Vegas Sands downstream to the domestic subsidiary to ease what we think are high debt levels?"

Meanwhile, at the Sands Bethlehem in Pennsylvania, total revenues were $82.8 million in the quarter, an increase of 31.4 percent. The property's results benefited from the introduction of 89 table games in July.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.