Las Vegas Sands (LVS) Pulls Out a Q3 Profit (Update)

October 29, 2009 5:23 PM EDT

(Update with comments from analysts)

Las Vegas Sands Corp. (NYSE: LVS) reported 3 cents earnings per share in the third quarter, 4 cents better than the analyst estimate of a 1 cent loss. Revenue for the quarter was $1.14 billion, slightly below the estimate of $1.17 billion but up 3.2% from last year.

Operating income for the company saw a positive movement in the the third quarter with a 121.3 percent increase to $62.4 million, up from $28.2 million in the year-ago quarter. The operating income increase was in large part do to the stead execution of the Company's cost saving and efficiency directions in Macau.

The Company is focused on the cost cutting initiatives throughout Las Vegas Sands businesses. This will help the hotels and casinos run by the Company to hold on to profit until the weak economy turns and gaming volumes return.

"Our annualized cost savings will exceed $500 million across our entire organization and we will continue to pursue additional areas where savings may be achieved," Mike Leven, president and COO, stated.

"While our current quarter's results in Las Vegas reflected unusually low table games hold, which negatively impacted our revenues by approximately $40 million, the execution of our cost savings programs has positioned us to deliver improved operating margins and cash flows as the economy recovers," Sheldon G. Adelson, chairman and CEO, stated.


Analyst Comments:
Keybanc Capital Markets has maintained a Hold rating on Las Vegas Sands after the third-quarter results were released, noting that the numbers, coupled with an upbeat conference call, will allow the company’s stock to rebound in the weak economy.

“We expect further cost cutting initiatives along with less severe declines in Macau gaming revenues to offset much of our concerns about Las Vegas,” Keybanc analyst stated. This reflects the improving market in Macau, while Las Vegas continues to struggle as consumers are less likely to gamble in the casinos.

Susquehanna analysts see potential in the Macau top-line margins, while noting the Company’s cost savings program is now 90 percent implemented. Susquehanna has maintained a Neutral rating on Las Vegas Sands, waiting to see the impact of the Macau IPO and the Singapore opening.

Las Vegas Sand is currently trading up 5.59 percent at 15.60 in market movement.

Related Categories

Earnings

Stocks Mentioned

Related Entities

• KeyBanc
• Susquehanna International Group of Companies

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