Las Vegas Sands, Melco, MGM Resorts Among Companies With Frequent Coronavirus Mentions on Earnings Calls

Posted on: March 10, 2020, 04:11h. 

Last updated on: March 10, 2020, 04:35h.

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

Las Vegas Sands (NYSE:LVS) and Melco Resorts & Entertainment (NASDAQ:MLCO) are among the companies that most frequently mentioned the novel coronavirus on recent earnings conference calls, a sentiment that isn’t confined to the gaming industry.

Gaming companies experienced frequent coronavirus mentions on earnings conference calls. (Image: Reuters)

Amenity Analytics, a provider of natural language processing (NLP) software, recently analyzed nearly 1,800 conference calls from the recently completed fourth-quarter earnings season, turning up 11,341 mentions of the coronavirus. That figure includes mentions of the respiratory illness by analysts and management on the calls.

LVS, the operator of five Macau integrated resorts, reported fourth-quarter results on Jan. 29 with Chairman and CEO Sheldon Adelson calling the COVID-19 situation “unique and serious.” There were 28 mentions of the virus on that conference call, the most among gaming companies, according to Amenity data.

The first case of the coronavirus emerged in China in mid-January, with the first instance being identified in Macau – the world’s largest gaming center – several days later. That’s relevant because companies have yet to report results for the first three months of 2020, the period in which the epidemic wracked the global travel and leisure industry.

Some analysts have said first- and second-quarter reports for Macau operators will be rendered moot because there will be essentially no earnings to speak of. More broadly, Credit Suisse says the biggest brunt of the outbreak will be felt economically and on profit updates in the April through June period.

LVS Isn’t Alone

In fairness to Las Vegas Sands, the company wasn’t even the worst travel and leisure offender regarding coronavirus conference call mentions. Several others, including Norwegian Cruise Lines and InterContinental Hotels, had more references to the illness on recent earnings calls.

Among other gaming companies, Melco had 19 virus mentions on its recent analyst call, according to Amenity Analytics data. MGM Resorts International (NYSE:MGM), the operator of two Macau venues, experienced seven coronavirus references on its Feb. 12 earnings update.

That company did withdraw its 2020 financial guidance due to “uncertainty” stemming from the coronavirus.

Underscoring speculation that virus references could increase in the coming months, gross gaming revenue (GGR) in Macau plunged almost 88 percent in February and is tracking lower by 79 percent to start March.

Interesting Surprise

Perhaps the most surprising takeaway from the Amenity Analytics data is that there were just four mentions of the coronavirus on Wynn Resorts’ (NASDAQ:WYNN) Feb. 6 earnings update.

That company derived about 65 percent of its revenue from Macau in the last three months of 2019 and said it was losing up to $2.6 million per day due to a forced closure of gaming venues there. Last week, Wynn Macau, the holding company for the operator’s two properties on the peninsula, said, “We cannot reasonably estimate the impact to our future results of operations, cash flows, or financial condition,” citing the virus.

Overall, there have been 2,117 coronavirus mentions on consumer discretionary companies’ conference calls. That’s the sector classification for gaming companies. Industrials are second with 2,115 COVID-19 references, according to Amenity.