Las Vegas Sands Corp. (LVS) recorded adjusted earnings of 34 cents per share in the third quarter of 2010, beating the Zacks Consensus Estimate of 23 cents and 3 cents in the year-earlier quarter.
On a GAAP basis, the company reported net income of $168.0 million or 21 cents, compared with a loss of $123.0 million or 19 cents in the year-ago quarter, primarily reflecting an increase in operating income.
Quarterly revenues climbed 67.3% year over year to $1.91 billion, outperforming the Zacks Consensus Estimate of $1.78 billion. Consolidated adjusted property EBITDA (Earnings before interest, taxes, depreciation and amortization) shot up 136.9% to $645.2 million from the year-ago quarter.
The company’s results reflect strong performance at its Macau business as well as outstanding results at its new resort in Singapore.
Macau Businesses
Las Vegas Sands’ integrated resort properties and other assets in Macau are owned and operated by Sands China Ltd., which is a majority-owned subsidiary of the company. Sands China reported a 27.7% year-over-year growth in revenues to $1.08 billion.
Revenues were up 25.6% year over year at $620.7 million at The Venetian Macau while Sands Macau increased 2.6% to $288.2 million. Revenues at the Four Seasons Hotel Macau and Plaza Casino increased substantially to $160.4 million from $67.1 million in the prior-year quarter.
Macau, the only Chinese city where gambling is legal, has survived the economic downturn relatively well. Gaming-friendly policies of the local government have facilitated the industry to achieve record earnings in the city.
Las Vegas Businesses
Revenues from the Las Vegas operations, which consist of The Venetian Las Vegas and The Palazzo, also spiked up 26.9% year over year to $290.7 million. The operating environment in Las Vegas is improving with strong group booking and increased occupancy.
Marina Bay Sands in Singapore
In Singapore, Las Vegas Sands opened Marina Bay Sands on April 27, 2010, and this is the first full quarter of operations. Revenues in the third quarter came at $485.9 million. The property has been well received by the market and it provides great opportunity to the company to explore the Asian market.
Balance Sheet
At quarter end, the company had $2.39 billion in unrestricted cash balance and short-term investments. Total debt outstanding was $10.14 billion. The company has scheduled principal payments of $37.9 million this year and $798.0 million in 2011.
Our Take
We believe the company is on track to deliver solid results. We expect its Asian operations to significantly support its earnings in the coming quarters. The company reported better-than-expected results, thus estimates are most likely to increase in the coming days.
We have a Zacks Rank of #2 (short-term Strong Buy rating) on the shares.
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