Las Vegas Sands grew revenues, net income and cash flow in the second quarter, but the investment community wasn’t initially all that thrilled Wednesday.
The company’s shares fell 7 percent in after-hours trading moments after Las Vegas Sands announced results for the quarter that ended June 30.
Las Vegas Sands, the first of the major gaming companies to report second quarter results, said its net income was up 64 percent to $1.1 billion in the quarter, due primarily to a $556 million gain from the sale of the Sands Bethlehem resort in Pennsylvania. The transaction, in which the Poarch Creek Indian tribe acquired the casino for $1.16 billion, closed on May 31.
Companywide cash flow grew 1.5 percent to $1.2 billion
During a conference call with analysts, Las Vegas Sands President Rob Goldstein said the company “had another strong quarter across all our markets.”
Las Vegas Sands Chairman and CEO Sheldon Adelson, 85, who is undergoing treatment for non-Hodgkin’s lymphoma, did not participate in the conference call, the third straight earnings call in which he has been absent.
“We want everyone to know that Sheldon is doing fine,” Goldstein said at the call’s outset. “(CFO) Patrick (Dumont) and I visited him two weeks ago in Israel, and he is in great spirits. We look forward to him rejoining our next conference call in October.”
In a statement from the company, Adelson said Las Vegas Sands is “enthusiastic” about the company’s growth opportunities in Asia, which includes more than $5 billion in expansion to existing resorts in Macau and Singapore.
“We are also aggressively pursuing additional development opportunities in new markets, including in Osaka, Japan,” Adelson said.
In the quarter, Las Vegas Sands total revenues grew less than 1 percent to $3.33 billion. Revenues from the company’s Macau holdings were up just 2 percent to $2.11 billion while the Marina Bay Sands in Singapore saw revenues decline 2.4 percent to $688 million.
In Bethlehem, the company’s revenues declined 33.8 percent, but the company only operated the casino for two months in the quarter.
“This project has been a great success for the company, not just financially, but in terms of its positive impact on the wider regional economy and local community,” Goldstein said.
Revenue from the company’s Las Vegas properties, Venetian and Palazzo, grew 15.9 percent to $466 million.
“We had a good quarter in Las Vegas and we’re very proud of it,” Goldstein said. Dumont added that Las Vegas Sands has been “reinvesting significantly in Las Vegas over time.”
More than 80 percent of the company’s second quarter revenues came from its Asian casino operations. In Macau, Goldstein said Las Vegas Sands, which has five gaming and resort complexes, said the company’s market share in the quarter was 23 percent, which was “consistent with the prior year.” He said the company grew its mass market table game and slot revenues by 6 percent.
“During the quarter we celebrated the 15th anniversary of the Sands Macau opening, which really marked the beginning of Macau’s amazing transformation,” Goldstein said. “Sheldon’s vision more than a decade ago to create the critical mass of integrated resorts on Cotai, with hotel, entertainment, retail and (meeting and convention) facilities, positions us well for the future.”
Goldstein said the company’s investments in Macau contribute to the market’s “diversification and evolution” as an Asian leisure and business tourism destination.”
Las Vegas Sands is planning to spend more than $2 billion in Macau over the next two years, primarily on the renovation, expansion and rebranding of the its Sands Cotai Central complex into The Londoner Macau, a $1.35 billion London-themed resort first announced in 2017.
In addition to creating The Londoner, the company is spending $400 million for the 370-suite St. Regis Tower Suites and $450 million for the 290-suite Four Seasons Tower Suites. Both are expected to be completed by the first quarter of 2020.
The Londoner project is being constructed in phases to create minimal disruption and is expected throughout 2020 and 2021.
In April, the Las Vegas Sands announced an agreement with the Singapore government to extend the company’s license for the Marina Bay Sands and will invest $3.3 billion into the property that will include a 15,000-seat arena, a 1,000-room hotel, and additional convention space.
Shares of Las Vegas Sands closed at $64.95 on the New York Stock Exchange Wednesday, down 27 cents or 0.41 percent. After the initial after-hours decline, the company’s shares climbed back somewhat and were down 2 percent later in the day.
Las Vegas Sands has $12 billion in long-term debt.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
