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Gaming Guru

Howard Stutz

Las Vegas Sands sees revenues rise, but profits fall

2 November 2012

LAS VEGAS -- Las Vegas Sands Corp. grew revenues 12.5 percent in the third quarter but experienced a slight decline in net income.

The company, which operates casinos on the Strip, Macau, Singapore and Pennsylvania, said Thursday its net income for the three-month period ended Sept. 30 was $349.8 million, down 1.1 percent compared with the same quarter in 2011.

Earnings per share were 42 cents, down from 44 cents a year earlier. Analysts polled by FactSet expected the company to earn 60 cents a share.

Las Vegas Sands overall net revenues were $2.71 billion, compared with $2.41 billion in the third quarter of 2011.

More than 60 percent of Las Vegas Sands' total revenues in the quarter came from the company's holdings in Macau. Combined, The Venetian Macau, Sands Macau, Four Seasons Macau and the Sand Cotai Central complex reported revenues of $1.64 billion, an increase of 36.7 percent.

In remarks on the company's conference call with investors and analysts, Chairman and Chief Executive Officer Sheldon Adelson said Macau will continue to be the company's driving force for revenue growth.

The $4.4 billion Sands Cotai Central, which includes multiple hotels surrounding shared casino, retail, dining, entertainment and convention space, opened in the first phase in April and its second last month.

"We expect the attractions and offerings of Sands Cotai Central, and in particular its vast inventory of hotel rooms and suites, to meaningfully benefit Macau and the Cotai Strip as it strengthens its position as one of the leading business and leisure destinations in the world," Adelson said.

Las Vegas Sands will operate 28 million square feet of resort space among the company's properties on the Cotai Strip.

Susquehanna Financial Group gaming analyst Rachael Rothman said Las Vegas Sands was gaining market share in Macau, based on October's gaming revenues for the market.

"Las Vegas Sands market share of 20.5 percent was an improvement from third quarter's 19.2 percent," Rothman said. "The result is encouraging and supports our thesis of continued market share gain commensurate with the ramp of Sands Cotai Central."

In Las Vegas, the company's revenues from The Venetian and Palazzo grew 4.9 percent to $364.4 million.

Room revenues at the two properties fell 7 percent, however their gaming revenues rose 38 percent in the quarter.

Table game wagering, which benefited from strong growth in baccarat play, increased 8.5 percent to $581.5 million. Slot machine wagering increased 1.7 percent to $498.4 million.

The company also experienced a 21 percent decline in revenues from the Marina Bay Sands in Singapore. The resort reported $625.5 million in revenues, which included a 27.8 percent decline in gaming revenues.

"Despite low hold on table games play at Marina Bay Sands in Singapore, our financial results reflect strong revenue growth and cash flow for the quarter," Adelson said.

Las Vegas Sands said it had outstanding long term debt of $9.5 billion as of Sept. 30.

Las Vegas Sands shares rose 2 cents, or 0.04 percent, Thursday to close at $46.46 on the New York Stock Exchange. In after-hours trading, Las Vegas Sands shares rose 39 cents, or 0.84 percent, to reach $46.85 at 5 p.m. PDT.