{"id":15902,"date":"2015-04-23T09:50:27","date_gmt":"2015-04-23T17:50:27","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/?p=15902"},"modified":"2015-04-23T13:46:07","modified_gmt":"2015-04-23T21:46:07","slug":"sands-penn-and-pinnacle-report","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/sands-penn-and-pinnacle-report\/","title":{"rendered":"Sands, Penn and Pinnacle report"},"content":{"rendered":"

“Tough to find positives … worse than feared” were the attention-grabbing headlines on Deutsche Bank<\/strong> analyst Carlo Santarelli<\/strong>‘s summary of Las Vegas Sands<\/strong>‘ first-quarter report. \"Sands-Macao\"<\/a>Of the crisis in Macao<\/strong>, he wrote, “While management remains optimistic with respect to cost control, we believe it will be difficult to tweak much to soften the impact stemming from both market performance and new competition.” The quarter was also marred by 9% lower average hotel occupancy — an area of the Macanese market where Sands leads with its chin.<\/p>\n

J.P. Morgan<\/strong>‘s Joseph Greff<\/strong> cited “negative operating leverage associated with sizable gaming revenue declines and the degree to which it is difficult to presently right-size labor and other operating expenses there.” He predicted near-term volatility and recommended MGM Resorts International instead<\/strong>: “our preferred way to play the LV Strip\/Macau operators at this time.” Sands executives were at pains to downplay some recent bad news from the enclave. “We interpret LVS\u2019s conference call comments to suggest that the proposed 21m visitation cap on Mainland may not be implemented as it would retard some of the government\u2019s goals to position Macau as a leisure destination (it\u2019s a real risk nonetheless),” Greff reported. Sands CEO Sheldon Adelson, however, openly scoffed at the talk of a cap<\/a>, calling it “the opinion of one man” and making a joke about his own propensity for wearing toupees.<\/p>\n

\"adelson_t200\"<\/a>Although the company didn’t raise the issue of possible attrition from Sands China<\/strong> to Galaxy Entertainment<\/strong>‘s new casino, ” we suspect this is one way LVS can manage expenses going forward by not backfilling employees who choose to leave (we assume LVS wouldn\u2019t want to state this publicly).” On the sunny side, operating profits from the Sands Cotai<\/strong> retail mall were up 29% and the Singapore<\/strong> mall improved profitability by 23%. Marina Bay Sands<\/strong> continues to be the best $7.5 billion bet Adelson has ever made, yielding\u00a021% ROI. On the domestic front, Venelazzo<\/strong> came in $26 million under Greff’s projections, 2% down in both net revenues and revenue per available rooms.<\/p>\n

* Greff found Penn National Gaming<\/strong>‘s performance to be right in line with projections. Looking ahead, the company “reasonably set 2015 targets that don\u2019t contemplate much of a same-store regional recovery.” The only negative blip on the radar was an 11% western-regional decline, blamed on\u00a0Zia Park Race Track & Black Gold Casino<\/strong>, “soft due to its dependence on the oil economy there.” Stock-based cash rewards pushed corporate expenses upward but,\u00a0minus\u00a0that, ” the \"Zia<\/a>operating results were much stronger.” Penn advised Wall Street<\/strong> to expect lower revenues and cash flow ahead and predicted a mid-2016 for its casino at Jamul Indian Village<\/strong>, in California<\/strong>.<\/p>\n

Santarelli, however, declared that “we believe the bull case remains in PENN and continue to see upside in shares into the June 24<\/span><\/span> Plainridge Park<\/strong> opening.” He saw the lower earnings guidance as a cunning ploy, that “management has left room in the margin guidance by effectively implying a flat 2H15<\/span><\/span> y\/y margin, despite 8% y\/y implied net revenue growth and expense reductions.” He added that Penn was benefited from stable promotional dynamics and “management believes 2Q15 will be a true barometer of customer health.”<\/p>\n

* Pinnacle Entertainment<\/strong> posted results that were “much stronger than forecast” and broad-\"lauberge_exterior\"<\/a>based, according to Greff. He was, however, more interested in the negotiations between Pinnacle and would-be buyer GLPI<\/strong>, extrapolating that the deafening silence “would suggest to us some level of engagement on price and terms.” Revenues (up 7.5%) and cash flow “easily exceeded” Wall Street’s expectations, with only Lake Charles<\/strong> posting a slight decline. Greff gave props to L’Auberge\u00a0Baton Rouge<\/strong>, Ameristar East Chicago<\/strong>, River City<\/strong> and Ameristar Kansas City<\/strong> for double-digit growth in cash flow. Belterra Park<\/strong> was effectively hors concours<\/em> for the quarter, having been affected by 11 days of Ohio River<\/strong> flooding, including four days of total closure. However, the company banked $25 million from real estate sales in Springfield<\/strong>, Massachusetts<\/strong>, and in Reno<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"

“Tough to find positives … worse than feared” were the attention-grabbing headlines on Deutsche Bank analyst Carlo Santarelli‘s summary of Las Vegas Sands‘ first-quarter report. Of the crisis in Macao, he wrote, “While management remains optimistic with respect to cost … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[34,190,68,84,62,112,11,39,69,30,111,12,108,9,20,38],"tags":[],"_links":{"self":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/15902"}],"collection":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/comments?post=15902"}],"version-history":[{"count":5,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/15902\/revisions"}],"predecessor-version":[{"id":15921,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/15902\/revisions\/15921"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/media?parent=15902"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/categories?post=15902"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/tags?post=15902"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}