Posting a 21% increase in revenue, Las Vegas Sands reported 97 cents/share in earnings (Wall Street had expected $0.94). No surprise, Macao was the primary driver. Analysts were also pleased by a $810 million buyback of Sands shares, bolstering the stock price. Profitably also grew at Marina Bay Sands, in Singapore, up 10% ($435 million). Overall profitability rose 36%. Net revenue was down 7% at the company’s Las Vegas properties and Sands Macao was flat. But Venetian Macao reported 36% growth and Four Seasons Macau & Plaza Casino was up 66%, while Sands Cotai Central made do with 41% growth. Revenue growth — as opposed to profit — was relatively modest at Marina Bay Sands, up 5%. Red-headed stepchild Sands Bethlehem was down 6%.
“From the time of Confucius … nobody has been able to suggest that the Chinese and other Asian peoples don’t want to challenge luck. They have been wanting to challenge luck for 3,000 years and nothing, through thick or thin, tall or short, slim or fat, nothing has stopped them, and I don’t think anything will,” said Sheldon Adelson of his Chinese bounty. He added pithily, “It was my vision. I created the Cotai Strip, and now today everybody will cut off their right arm to get a piece of land in Cotai when everybody thought in the past that it wasn’t going to succeed. Well, today I have a warehouse full of right arms.”
In Las Vegas, room rates averaged $241/night, the best number Sands has seen since mid-2008. J.P. Morgan analyst Joseph Greff described Sands’ non-gambling revenue in Macao as “better than expected” and also lauded its “ability to use its sizable hotel room base and more effective target marketing to generate above market-wide growth in the mass segment.” Sands’ Macanese and Singaporean cash flow were both well in excess of Greff’s estimates. ($940 million instead of $898 million, and $435 million rather than $395 million.)
Carlo Santarelli of Deutsche Bank called these “modestly better than expected” and characterized the quarter as unsurprising. Adelson’s doing so well he’s making Wall Street hard to impress.
Both the Republican and Democratic parties are considering Las Vegas for their 2016 conventions. By the time it rolls around, Mandalay Bay ought to have finished a 20% expansion of its exhibit space, making it the fifth-largest convention center in the U.S. In keeping with MGM Resorts International‘s emphasis on sustainability, the event center will be crowned with a photovoltaic array that will be the largest convention-center solar array on the globe. MGM attributes the expansion to demand by clients of long standing but says it hopes to lure new ones, too.
Two cheers for Caesars Entertainment, which is willing to close its Council Bluffs greyhound track and pay $32.5 million “for a retirement fund to pay owners and breeders who chose to quit racing and to set up no-kill adoption shelters to care for and find homes for the retired race dogs.” Well done. Unfortunately, another $32.5 million would go to subsidize continued dog racing at Mystique racino in Dubuque. (Mystique is putting another $7 million into the fund.) It seems like the price of discontinuing this “sport” in one place is ramping it up in another.
