Las Vegas Sands Beat Street Estimates Driven By Macau Properties

Las Vegas Sands (NYSE:LVS) released its first quarter results last week, with consolidated net revenues of $3.65 billion and adjusted EPS of $0.91, beating street estimates. The company’s total revenues grew by 1.9% over the prior year quarter, driven by 2.4% growth in casino revenues and a strong performance by the company’s Cotai Strip hotels.

The Trefis price estimate for Las Vegas Sands is $77 per share, which is above the market price. You can view our interactive dashboard on How Has Las Vegas Sands Fared In Recent Quarters? to observe the quarterly revenue trends and modify yearly earnings to gauge the impact on the stock price, and see more of our Consumer Discretionary Sector data here.

Macau Properties

LVS properties in Macau contribute around 64% of the consolidated net revenues and has been the major source of growth for the company over the last 2 years. The casino revenues in Macau have been consistently growing at 16% annually driven by increased visitation from different Chinese provinces.

• The net revenues increased by 8% to $2.33 billion, and adjusted EBITDA margin improved by 30 basis points to 36.8% this quarter.
• The Cotai Strip hotels remain a cornerstone to the business in Macau, with total Cotai revenues growing by 9.4% over the prior year quarter. Growth was driven by casino revenues, where the mass-market win percentage saw an improvement across properties.

Singapore Property

Marina Bay Sands contributes around 25% of the consolidated net revenues and has been observing declining revenues over the last couple of years, barring 2017.

• The net revenues decreased by 12% to $767 billion, driven by a sharp drop in casino revenues, over the prior year quarter.
• Casino revenues declined due to a significant drop in rolling chip volume, mass-market volume, and slot handle.
• The room occupancy improved by 1.3% to 98.1% this quarter, resulting in an increase in room revenues by 2% to $102 billion.

Las Vegas Properties

The share of Las Vegas properties in consolidated net revenues has been declining consistently over the last couple of years from 13% in 2015 to 10% in 2018, driven by a consistent drop in casino revenues in Las Vegas over the last decade.

• The net revenues declined by 1.3% to $471 billion, driven by lower casino revenues and a minor upside from room revenues, over the prior year quarter.
• The hotel occupancy rate declined by 0.9% and average daily rate increased by 2.3%, over the prior year quarter.
• The EBITDA margin remained almost flat compared to the prior year quarter at 29.3%.
• The management expects group business meetings, non-gaming offerings, international baccarat business, and room price increase as future growth opportunities in Las Vegas.

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