Key Takeaways From Las Vegas Sands’ Q4 Earnings

by Trefis Team
Las Vegas Sands
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Las Vegas Sands (NYSE: LVS) reported another strong quarter this week, ending 2017 on a high note. LVS grew consistently throughout the year, beating estimates in each quarter. Net revenues for the fourth quarter grew to $3.44 billion (+12% year-on-year), while its EPS rose sharply from $0.64 in Q4’16 to $1.53 in Q4’17, primarily due to the income tax benefit from U.S. tax reform and strong performances in Macau and Marina Bay Sands operations. Below, we have summarized the major takeaways from Las Vegas Sands’ Q4 earnings using our interactive dashboard.

Casino Business Growth Propelled Margins

Casino revenue accounts for nearly 78% of Las Vegas Sands’ revenue and continued to report strong momentum in its top line throughout the year. Revenue from the casino business grew 13% y-o-y to $2.68 billion in Q4’17. Operating margins grew from 22% in Q4’16 to 30% in the current quarter. The improved margins were fueled by growth in its Macau & Marina Bay Sands operations.

The robust recovery in Macau coupled with growth in mass gaming market fueled the fourth quarter growth. Casino revenue from Macau operations recorded a 15% increase in Q4’17. The increase was attributable to 27% increase in mass table games win percentage, outperforming the estimated growth in this market. Marina Bay Sands in Singapore delivered yet another impressive quarter, the Singapore operations recorded a 16% increase in Q4’17, driven by innovative programming, and mass gaming play. Given the continued recovery of the casino industry in Macau and growth of the casino market in Singapore, we expect that sustained growth in the mass gaming market segment will further boost the Macau and Marina Bay Sands operations.

Going Forward

The company is all set to unveil its new entertainment complex plan either in February or March, and the project is expected to be completed by the summer of 2020. The facility, being built by Las Vegas Sands and Madison Square Garden, is specifically built for concerts and entertainment. As gaming companies are looking to draw more customers, LVS is betting on reaping benefits from an exclusive entertainment complex. These initiatives might have a short-term impact on the company’s bottom line, but should provide long-term benefits once they come into operation.

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