Comment – Las Vegas Sands will continue to do well mainly because of their foray into Asia, first Macau and now in Singapore. LVS stock is already up 54% for this year and once the expanded Sands Macau opens we do expect it to go even higher this year.
Hotelier and casino operator Las Vegas Sands Corp. reports second-quarter earnings on Wednesday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: In May, Las Vegas Sands won a hotly contested bid to build Singapore’s first casino, which could be the world’s costliest casino resort project by the time it opens in 2009.
Singapore last year reversed its decades-old ban on casino gambling, and said it would award licenses to operate a casino resort at Marina Bay and another on the resort island of Sentosa to boost tourism and help the city-state shed its straight-laced image.
Las Vegas Sands was selected for the Marina Bay license over three other bidding groups — MGM Mirage and CapitaLand Ltd.; Harrah’s Entertainment Inc. and Keppel Land Ltd.; and Genting International PLC and Star Cruises Ltd.
The casino-resort at Marina Bay is likely to cost more than 5 billion Singapore dollars ($3.16 billion), Singapore’s Deputy Prime Minister S. Jayakumar said during a May news conference.
In June, the company announced plans to develop a resort in Macau that will be managed by Fairmont Raffles Holdings International.
The resort will be part of the Cotai Strip development on Cotai — an area of reclaimed land between the islands of Taipa and Coloane in Macau.
Las Vegas Sands owns and runs the Sands Macao, a casino on the city’s peninsula, and is developing other hotel projects on Cotai.
EXPECTATIONS: Analysts polled by Thomson Financial expect second-quarter earnings of 34 cents per share on sales of $520.7 million.
ANALYST TAKE: Lehman Brothers analyst Felicia Kantor Hendrix remains confident on Las Vegas Sands.
“Las Vegas Sands remains our top pick given the company’s growth prospects in Asia,” she said in a July client note.
The analyst anticipates the company will report upside to her estimate of 35 cents per share on strong results at the company’s Venetian Resort Hotel Casino in Las Vegas and Sands Macau. She also expects the company’s “outlook to be bullish following its progress on the Cotai Strip and receipt of Singapore’s Marina Bay gaming license.”
Steven Kent, an analyst with Goldman Sachs, also focused on the Venetian in a July client note, estimating the property’s revenue-per-available-room growth rate — also known as RevPAR — at 1.3 percent. He estimates second-quarter earnings at 31 cents per share.
JPMorgan analyst Harry C. Curtis forecast earnings of 36 cents per share in the quarter. He sees modest RevPAR growth at the Venetian.
“The strongest second-quarter earnings-per-share outperformance should come from Vegas operators like MGM Mirage Inc. and Las Vegas Sands by virtue of exceptional high-end play, strong room demand and better-than-expected non-gaming revenues,” he said in a July client note.
STOCK PERFORMANCE: Shares of Las Vegas Sands climbed 42 percent in the quarter and are so far ahead 54 percent for the year. They closed at $62.77 Friday on the New York Stock Exchange.
AS reported by © 2006 The Associated Press.
