LAS VEGAS, Nev. – Las Vegas Sands Corp. beat Wall Street’s expectations with its third-quarter results as record profits in Macau helped make up for continued weakness in Las Vegas.
The gambling giant’s net income nearly doubled, driven by growth at Sands’ five Macau properties. Macau is the only place in China where casino gambling is legal.
Sands’ billionaire CEO Sheldon Adelson on Thursday cited the company’s ability to develop “large, iconic projects” as the key to its growth. Sands was the first U.S. corporation to enter Macau, now the world’s largest gambling market. The enclave issued a limited number of gambling licenses in the early 2000s, and some U.S. competitors were shut out.
“I couldn’t be more confident about our continued success,” Adelson told analysts during a conference call.
China Ltd., which runs Las Vegas Sands’ Macau properties, now accounts for more than two-thirds of the company’s revenue. Sands China’s revenue rose 42.7 per cent during the third quarter.
Adelson said he is watching Japan closely to see if it might become the next major market for Sands. He said the company could change major Japanese cities for the better.
“Our integrated resorts in the first 24 months increased tourism in Singapore by 41 per cent. It’s generally acknowledged we have changed Las Vegas with our business model and convention phase. We have changed Macau,” he said. “Everybody in the government will acknowledge that. And we could easily change any other city in which we have a focused, paced business model.”
Revenue remained sluggish at Sands’ two Las Vegas casinos, the Venetian and Palazzo. Only restaurants and clubs showed significant growth, with food and beverage revenue rising 22 per cent from last year. Casino revenue was down.
Sin City patrons are increasingly rejecting gambling in favour of high-end drinking and dining, forcing casino companies into an entertainment arms race. Sands’ Las Vegas casinos host two of the 10 most profitable clubs in the U.S., according to the trade publication Nightclub & Bar.
The company reported net income of $626.7 million, or 76 cents per share, up from $349.8 million, or 42 cents per share. Revenue grew by 32 per cent to $3.57 billion.
Adjusted earnings were 82 cents per share. Analysts polled by FactSet predicted adjusted earnings of 76 cents per share on revenue of $3.47 billion.
The company’s stock rose 18 cents to $71.15 in aftermarket trading after a 2 per cent rise during regular-session trading.