Why is Las Vegas Sands (LVS) Up 9.6% Since Its Last Earnings Report?

A month has gone by since the last earnings report for Las Vegas Sands Corp. LVS. Shares have added about 9.6% in that time frame.

Will the recent positive trend continue leading up to its next earnings release, or is LVS due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Las Vegas Sands Q1 Earnings Top on Solid Macao Sales

Las Vegas Sands delivered yet another impressive performance, with both earnings and revenues beating the Zacks Consensus Estimate for the fifth straight quarter.  

Adjusted earnings per share of $1.04 surpassed the consensus mark of 86 cents by 20.9% and increased 57.6% year over year on higher revenues. Also, net revenues of $3.58 billion outpaced the consensus estimate of $3.36 billion and improved 16.7% on a year-over-year basis.

In the quarter under review, Las Vegas Sands’ results were driven by robust performance across Macao, Singapore and Las Vegas. Furthermore, the company remains focused on a convention-based Integrated Resort business model that helps in generating the most diversified set of cash flows and profit from non-gaming segments while bringing unsurpassed economic and diversification benefits to the regions in which it operates.

Property Performances: Asian Operations

The company's Asian business includes the following resorts:

The Venetian Macao

Net revenues increased 19.6% year over year to $868 million, owing to a 20.1% increase in casino revenues, 35.7% growth in room revenues, a 3.9% improvement in mall revenues and 35.3% rise in food and beverage revenues. However, revenues convention as well as retail and other revenues declined 5% each.

Adjusted property EBITDA was up 20.4% year over year to $348 million in the quarter.

Non-Rolling Chip Drop increased 29.9% and Rolling Chip volume improved 27.9%.

Sands Cotai Central

Net revenues were up 19.6% year over year to $549 million driven by a 21.5% improvement in casino revenues, a 26.2% rise in room revenues, a 20.8% increase in food and beverage revenues. However, mall as well as convention, retail and other revenues fell 26.3% and 14.3%, respectively, from the year-ago level.

Adjusted property EBITDA was $201 million, up 40.6% year over year.

While Non-Rolling Chip Drop rose 19.8%, Rolling Chip volume was down 17%.

The Parisian Macao

Revenues increased 15.8% year over year to $359 million owing to a 19.8% rise in casino revenues and a 13.8% increase in Rooms revenues. However, revenues from Food and Beverage, and Mall declined 6.3% and 11.8%, respectively.

Adjusted property EBITDA jumped 41.5% year over year to $116 million.
Non-Rolling Chip Drop improved 10.5% while Rolling Chip volume rose 23.5%.

The Plaza Macao and Four Seasons Hotel Macao

Net revenues increased 38.4% to $191 million on a 54.3% increase in casino revenues as well as 14.3% and 12.5% increase in food and beverage revenues as well as Rooms revenues, respectively. Mall revenues remained flat.

Adjusted property EBITDA increased 43.1% to $73 million.

Non-Rolling Chip Drop and Rolling Chip volume increased 37.3% and 66.9%, respectively.

Sands Macao

Revenues were down 13.5% year over year to $154 million due to a 13.4% decline in casino revenues and a 20% plunge in room revenues. Food and beverage revenues remained flat.

Adjusted property EBITDA declined 13% to $47 million.

Non-Rolling Chip Drop increased 7.2%, while Rolling Chip volume declined 53.1%.

Marina Bay Sands, Singapore

Net revenues improved 26.4% year over year to $872 million on account of 32.5% rise in casino revenues. Moreover, room revenues as well as convention retail and other revenues rose 6.4% and 13%, respectively. Mall as well as food and beverage revenues increased a respective 10.5% and 20.9%.

Adjusted property EBITDA in the quarter was $541 million, up 48.6%.

Non-Rolling Chip Drop were up 8.6%, whereas Rolling Chip volume declined 17.3%.

Domestic Operations

Las Vegas Operations

Net revenues from Las Vegas operations, which comprise The Venetian Las Vegas and The Palazzo including the Sands Expo and Convention Center, increased 7.2% to $477 million owing to a 3.3%, 15.4% and 14.1% increase in rooms, casino and convention, retail and other revenues, respectively. The results were, however, somewhat offset by a fall of 3.3% in food and beverage revenues.

Adjusted property EBITDA in the quarter was $141 million, up 15.6%.

Table Games Drop increased 13.4%, while Slot Handle rose 2.3%.

Sands Bethlehem, PA

Net revenues at Sands Bethlehem were $134 million, down 3.6% year over year due to a 3.3% decline in casino revenues and a 14.3% decrease in food and beverage revenues. Rooms, mall as well as convention, retail and other revenues remained flat in the quarter.

Operating Results

On a consolidated basis, adjusted property EBITDA was up 30.7% year over year to $1.50 billion in the quarter on robust operating momentum in Macao and Sands Cotai Central operations. Strong mass non-gaming revenues along with higher hotel occupancy and retail mall revenues drove adjusted EBITDA.

Adjusted net income increased 55.5% year over year to $821 million.

Balance Sheet

As of Mar 31, 2018, unrestricted cash balances were $2.63 billion. Total debt outstanding, including the current portion and net of deferred financing costs along with original issue discount, was $9.65 billion.

In the reported quarter, capital expenditures came in at $238 million. This was mainly owing to construction, development and maintenance activities of $125 million in Macao, $35 million at Marina Bay Sands, $75 million in Las Vegas and $3 million at Sands Bethlehem.

Quarterly dividend paid by the company was 75 cents per share, while it repurchased $75 million of common stock.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month. There have been three revisions higher for the current quarter compared to three lower.

Las Vegas Sands Corp. Price and Consensus

 

Las Vegas Sands Corp. Price and Consensus | Las Vegas Sands Corp. Quote

VGM Scores

At this time, LVS has a nice Growth Score of B, though it is lagging a bit on the momentum front with a C. The stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is more suitable for growth investors than momentum investors.

Outlook

LVS has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

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