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Best of Howard Stutz

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Howard Stutz
 

Sands suffers quarterly net loss

6 May 2009

LAS VEGAS, Nevada -- Las Vegas Sands Corp. officials said Tuesday the company will plow ahead with the business plan it implemented in November despite suffering a first-quarter net loss of $34.6 million.

The operator of The Venetian and Palazzo on the Strip and two resorts in Macau said the net loss translated into a loss of 14 cents per share for the quarter that ended March 31.

A year ago, the company had a net loss of $11.2 million, or 3 cents a share. Analysts polled by FactSet Research expected the company to lose 3 cents a share in the quarter.

Companywide, Las Vegas Sands reported revenues of $1.08 billion, the same as a year ago.

Still, Las Vegas Sands Chairman and Chief Executive Officer Sheldon Adelson saw positives in the quarter. He said cost-cutting would save the company $470 million annually.

"The steady execution of the business plan we presented in November 2008, including the implementation of our cost-savings program, continues to be our primary focus as we navigate through the current challenging economic conditions," Adelson said in a statement. "We have made notable progress during the quarter on each of the three basic objectives of the plan."

Also, Adelson said he thought business on the Strip was "starting to trend upward." However, he does believe the full impact of any recovery won't be seen until after the summer.

During an hourlong conference call with analysts and investors to discuss earnings, Adelson referred several times to how the company's management team was "disciplined" and "working together without disagreements."

This was the company's first earnings report since the management upheaval earlier this year which saw the departures of President Bill Weidner, Executive Vice President Brad Stone and other officials. Much had been made in the last year how Adelson and his management team had been fighting over the company's direction.

"The business plan is working efficiently and we're making notable progress on our objectives," new Las Vegas Sands President Michael Leven said on the conference call.

Adelson said the company is maximizing cash flow at its resorts in Las Vegas and Macau, primarily through cost-savings.

Revenues were down almost 10 percent in the quarter at its Strip casinos, declined 6 percent at the Venetian Macau and were off 16 percent at the Sands Macau. However, the Four Seasons Macau, which opened last August, brought in net revenues of $47 million.

Leven said the opening of the $743 million Sands Bethlehem in Pennsylvania is on schedule for May 22 and the $5 billion Marina Bay Sands in Singapore is on track for an opening later this year.

Adelson said the company is trying to sell its 1 million-square-foot retail mall in Macau while he hopes construction on two hotel-casino sites on the Cotai Strip of Macau, which were halted last year, could be restarted by the end of the year.

The company reported earnings after the close of trading on the New York Stock Exchange. Shares of Las Vegas Sands increased $1.84, or 19.37 percent, to close at $11.34.