What To Expect From Las Vegas Sands In Q1

Las Vegas Sands (NASDAQ: LVS) will report its first-quarter 2018 results on April 25. Consensus market estimates call for the company to report revenue of $3.36 billion and adjusted EPS of $0.84. The company is expected to display strong performance with notably higher year-on-year (y-o-y) revenue and earnings. The company is likely to benefit from its strong brand, coupled with improving gaming and non-gaming services and expansion in the domestic market, which should help boost revenue. Below, we take a look at what to expect when the company reports earnings.

We have a price a $79 price estimate for Las Vegas Sands, which is higher than the current market price. The charts have been made using our interactive platform. You can click here to modify the different driver assumptions, and gauge their impact on the earnings and price per share metrics.

Promising Top Line Growth To Drive LVS’s Earnings

LVS derives nearly 58% of its overall revenues from Macau, and in the last few quarters, its revenues from the region grew strongly due to the casino industry rebound in the region. The gross gaming revenues (GGR) in Macau grew by nearly 21% y-o-y this quarter, indicating a strong start to the year. The Cotai strip has been witnessing strong traffic and higher occupancy rates, driven by the most recent addition of The Parisian Macao. Further, the company expects its diversified offerings in the Cotai strip to continue to provide solid growth. Given the improved outlook of the casino market in Macau, we expect another strong year for LVS in Macau driven by rising outbound travel,  strong spending growth, and its strong presence in the region.

Meanwhile, LVS continues to change its revenue mix by its sustained focus on convention-based integrated resorts, which helps to generate non-gaming revenue. These integrated resorts – which include retail malls, live entertainment and arenas as well as convention centers – have enabled substantial non-gaming revenues. The company is 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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