Las Vegas Sands Trounces Q1 Estimates on Macau Recovery

Posted on: April 19, 2023, 06:02h. 

Last updated on: April 20, 2023, 03:11h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Shares of Las Vegas Sands (NYSE: LVS) surged in Wednesday’s after-hours session. That’s after the casino operator posted first-quarter results that topped Wall Street forecasts due in part to the ongoing recovery in Macau.

Las Vegas Sands
The Venetian Macau, seen above. Operator Las Vegas Sands posted strong first-quarter results. (Image: Bobby Yip/Reuters)

The Venetian Macau operator posted earnings per share (EPS) from continuing operations of 28 cents on revenue of $2.12 billion in the first three months of 2023. Analysts expected per share earnings of 20 cents on sales of $1.85 billion. In Macau, where its Sands China unit runs five integrated resorts, mass gaming revenue topped $1 billion for the first time since before the coronavirus pandemic.

In Macau, we were pleased to see the ongoing recovery now underway in all gaming and non-gaming segments accelerate during the quarter. We remain deeply enthusiastic about the opportunity to continue our investments to enhance Macau’s tourism appeal to travelers from throughout the region, including to foreign visitors to Macau,” said CEO Rob Goldstein in a statement.

At the close of US markets today, Sands sported a year-to-date of 23.49% — good for one of the best showings among all large-cap gaming equities. Still, analysts believe the Macau rebound is in its infancy, indicating there could be more upside ahead for the stock.

Las Vegas Sands Sees Strength in Macau

With March standing as the special administrative region’s (SAR) best month in gross gaming revenue (GGR) since January 2020, it’s not surprising Macau was a highlight in Sands’ first-quarter update.

The operator’s Sands China unit notched revenue of $1.27 billion in the January through March period, more than doubling that figure on a year-over-year basis. The company’s net loss in Macau declined to just $10 million from $336 million a year earlier, confirming the veracity of the casino-gaming resurgence there.

“Our decades-long commitment to making investments that enhance the business and leisure tourism appeal of Macao and support its development as a world center of business and leisure tourism positions us exceedingly well to deliver strong growth as visitation to the market increases and the recovery in travel and tourism spending proceeds,” added Goldstein in the statement.

Las Vegas-based Sands finished the first quarter with $6.53 billion in cash on hand and access to $2.48 billion via various credit facilities. Debt stood at $15.97 billion.

Sands Hits Home Run in Singapore

Analysts and investors are likely focusing on Sands’ commentary regarding Macau. But Marina Bay Sands (MBS) in Singapore should not be lost in the shuffle.

At that venue, one of just two integrated resorts in the city-state, Sands generated adjusted property earnings before interest, taxes, depreciation and amortization (EBITDA) of $394 million as mass gaming revenue hit a record high of $549 million.

Rolling volume of $7.1 billion at MBS was on par with what was seen in the fourth quarter of 2019, and the first-quarter occupancy rate there was 97.6%, despite 500 rooms being out of service because of enhancements, according to a Sands investor deck.