Q1 Preview: Sands' (LVS) New Cotai Resort May Be the Talk, But Macau is Still the Walk

Las Vegas Sands (NYSE: LVS) shares closed lower Tuesday afternoon heading into its first-quarter earnings report, expected out before the market opens Wednesday. To listen to the quarterly conference call, click here.

The Street is looking for earnings of 59 cents per share and revs of $2.57 billion, compared to EPS of 57 cents reported last quarter and 37 cents produced in the same period last year.

For the first three months of operations, Macau revs growth saw a slowdown. January revenue in the region grew 34.8 percent, February was up 22.3 percent, and March saw a 24.4 percent increase. In total, gross revs for the first quarter of 2012 in Macau increased 27.0 percent.

In Las Vegas, gaming revenue increased 18.4 percent in January and 3.3 percent in February. Data from March wasn't available due to the delay in reporting.

Shares of Sands rose 35 percent through the quarter to $57.57 at the end of March. The move compares to an 8.1 percent dip in the first quarter last year, while Sands finished out 2011 off about 7 percent. Over the last year, Sands has traded within a range of $36.08 to $62.09.

Data from Bloomberg has 23 analysts at Buy, three at Hold, and two with a Sell on Sands. The Street's price target average is $63, which ranges from $48 to $72.

Analyst Comments

• Goldman Sachs sees EPS of 58 cents with revs of $2.6 billion. Macau revs outlook is at $1.4 billion with EBITDA of $483 million based on strong sequential trends.
  
  Goldman suspects focus in the quarter will rely solely on: (1) the recent opening of the first phase of Sands Cotai Central, and color on the timeline for the opening of the next phase, (2) the proposed resort development in Spain, (3) capital allocation, namely a possible increase in the annual dividend, and (4) potential for junket approval in LVS’s Singapore property.
  
  
• JPMorgan see EPS of 56 cents. The firm sees EBITDA of $974 million, with Venetian Macau EBITDA at $299 million and Sands Macau EBITDA at $90 million. JPMorgan commented, "We continue to like LVS here given traction with its junket re-engagement initiatives and enviable mass market positioning, which should only be enhanced with additional rooms coming on line at Cotai Central."
  
  
• KeyBanc sees EPS of 65 cents amid "operating trends, increasing market share in Macau and growth in Singapore." The firm stated, "Las Vegas Sands [recently] opened its important Sands Cotai Central project in Macau...which will be the last casino to open in Macau for the next three to four years. LVS has strong cash flow to pay for future growth projects in Macau and additional opportunities in Asia, Europe and the United States. In addition, LVS has the ability to pay down a considerable chunk of debt over the next few years, even after paying its newly initiated dividend. Macau and Singapore should continue along their growth planes, and an improving U.S. economy and consumer would help to boost results in Vegas and Pennsylvania."
  
  
• Deutsche banks sees EPS of 58 cents given "the recent opening of Sands Cotai Central, better than expected 1Q12 Macau market results, and continued LVS junket traction." Macau EBITDA is at $906 million, drive by $48 million in upside from its last outlook and improving Las Vegas flow through.

Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release. You can also check out Sands' past performance at Streetinsider's Sands' Income Statement.

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