Las Vegas Sands earned a cool $671 million profit in only three months, but the stock falls despite the earnings.
Las Vegas Sands made a profit of over $671 in 2014 during the second quarter, which is an incredible gain of 27 percent over the exact same period just last year. However, more than 66 percent of a billion dollars fell short of the analyst’s estimates along with the measly 11.8 percent increase in second quarter revenue to $3.62 billion. Picky investors responded with shock, pushing the stock subsequently back down by as much as 2 percent in after-hours trading.
Regarding the post-earnings call, Sheldon Adelson (chairman of the Sands) was swift to remind everybody that just one quarter or one month doesn’t create an actual trend. He quickly told them to ‘stop freaking out’ over one global hiccup and that nothing is going to change in Macau. In the three months ending in June 30, Sands received almost 17 million visits to its properties in Macua, which resulted in a record $801.3 million in adjusted earnings. But, expert analysts were obviously more interested in worrying over the $29 million ‘14th month’ bonuses Sands had provided its casino employees in Macau, the lack of which could have pushed the earnings of Sands up three cents a share.
As expected, Sands China earned the majority of the company’s revenue and profits. The Venetian Macao produced revenue upwards of $1.03 billion, followed by Sands Cotai Central’s whopping $785 million, Sands Macao’s $313 million, while the lush Four Seasons Hotel Macao and Plaza Casino came in last but not least with a $228 million in revenue.
Talk about drama, the mass market gambling sector took the reins in terms of owning the headlines. Venetian Macao’s table drop increased to 40.2 percent to $2.2 billion, while rolling chip volume for VIP’s increased only 4.2 percent to $12.3 billion. But, VIP win rate was an impressive 3.45 percent over both the typical range and the previous year’s figure, while mass win rate subsequently dropped 2.5 points to 25.7 percent.
This same situation was played out at Sands Cotai Central, where mass table drop increased 53.2 percent to a record, heart-stopping $1.9 billion, while VIP volume dropped 13.5 percent to $12.4 billion. The Four Seasons experienced VIP volume droop 43.2 percent to $5.6 billion as mass market drop almost doubled to an incredible $367 million. VIPs at Sands Macao gambled 20.1 percent less chips while the other mass tables profited 31.4 percent.
Slots handle revealed favorable gains at the Venetian Macao, Sands Cotai Central, and Sands Macao, while handle at Four Seasons kicked the trend, dropping 6.4 percent to $170 million. Up across the board was hotel room occupancy with Sands Cotai increasing 85 percent, Venetian Macao up 89 percent, Four Seasons up 86 percent, and Sands Macao up as much as 98.5 percent.
Singapore’s integrated resort the Marina Bay Sands reported as much revenue as 8.8 percent to $805 million. VIP chip volume dropped 27.3 percent to $10.4 billion. However, win was up almost a full point to a remarkable 3.45 percent. The mass market tables illustrated a somewhat rare weakness, with volume falling 5 percent to $1.1 billion, only partly compensated by a 1.4 point win gain to 24.8 percent. Slots handle increased 12 percent to $3 billion. Overall, the properties’ combined 2,500-plus hotel rooms experienced occupancy slip to 99.1 percent.
Sands’ Nevada properties, the Palazzo and the Venetian Las Vegas, reported cash earnings up 2.1 percent to $353.1 million as table drop decreased 20.2 percent and slots handle stretched out a 1.7 percent gain. Overall, occupancy dropped 1.5 points to 90.1 percent. Pennsylvania’s Sands Bethlehem experienced net revenue decrease 0.6 percent to $126.1 million, mainly due to a 3.5 percent drop in slots volume. The bottom line: Sands Bethlehem’s earnings were only $7.8 million more than what Sands’ Asian retail mall revenue brought in.