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LAS VEGAS, Nevada -- Las Vegas Sands Corp. gave Wall Street a preview of the company's first quarter earnings Friday to help aid marketing of a planned $5 billion domestic credit facility that will be used to fund some of its current projects in Las Vegas and Pennsylvania.
The company only announced the preliminary results for its Venetian casino on the Strip, saving results from the Sands Macau for when it unveils the complete quarterly financial picture during the first week of May.
The credit facility is expected to be used primarily to fund the company's domestic needs, including a planned $600 million casino and entertainment complex in Bethlehem, Pa., and the company's development projects that surround the Palazzo, a 3,000-room hotel-casino under construction adjacent to The Venetian.
Las Vegas Sands has plans to build a second convention and exposition center on 20 acres on the east side of Koval Lane across the street from the company's 1.1 million-square-foot Sands Expo Center. In addition, Las Vegas Sands has announced plans to build a 632-foot high-rise with 270 residential units near the Palazzo's Strip entrance.
The credit facility is also expected to provide funding for the company's future capital needs and general corporate purposes.
Las Vegas Sands Senior Vice President of Finance Scott Henry declined to comment about the credit facility in advance of the formal launch of the deal, expected to be next week.
Las Vegas Sands expects to open the Palazzo by the end of the year, which combined with The Venetian, will give the company 7,000 hotel rooms on the Strip.
This summer, Las Vegas Sands is expected to open the $2.4 billion Venetian Macau. The company is also building eight resorts on the Cotai Strip near Macau. Las Vegas Sands recently broke ground on the $3.6 billion Marina Bay Sands in Singapore, that is expected to open in 2009.
At The Venetian, Las Vegas Sands said it expects operating income to rise to between $86 million and $91 million in the first quarter, compared with $79 million a year ago. Cash flow at the property is expected to range between $107 million and $112 million, up from $101.1 million in the first quarter of 2006.
Hotel revenues increased 7 percent while retail and other operating revenues jumped 21 percent.
Meanwhile, in The Venetian casino, gaming revenues were $120 million, a 24 percent increase compared with $97.1 million a year ago. However, the results were offset by an increase in the provision for bad debt to $16 million, including approximately $10 million from one high-end customer. The figure is up from $4.7 million in the same quarter a year ago.
Las Vegas Sands President Bill Weidner said The Venetian had a strong performance throughout the property.
"The benefits of our targeted capital investments are contributing to solid top line performance at The Venetian," Weidner said in a statement. "Our high end business, in particular, continues to benefit from our investments in the infrastructure and amenities vital to our competitiveness and success in this increasingly important segment."
Gaming analysts said they thought the company will show even more upbeat quarterly earnings when the revenues from Sands Macau are included.
"These results once again highlight how powerful The Venetian property is especially that it can continue to generate increased (revenue per available room) growth with occupancy of 99 percent," Goldman Sachs gaming analyst Steven Kent said in a note to investors. "The other implication is given the continuing strong trends at their core Venetian property in Las Vegas, we think this will increase investors' confidence that Palazzo will also show strong results and returns."
Kent thought the earnings pre-release would help boost the price of Las Vegas Sands shares.
The company's stock closed at $88.31 on the New York Stock Exchange, up $1.95, or 2.26 percent.
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