Las Vegas Sands (LVS) Q2 Earnings Miss Estimates, Fall Y/Y

Las Vegas Sands Corp. LVS reported dismal second-quarter 2020 results, wherein earnings and revenues not only missed the Zacks Consensus Estimate but also declined sharply on a year-over-year basis.  

Despite the dismal performance, the company is optimistic about future growth on a strong balance sheet. Also markets in Macao, Singapore and Las Vegas are in the initial stages of recovery amid the pandemic effect.

Earnings & Revenue Discussion

The company reported adjusted loss per share of $1.05, wider than the Zacks Consensus Estimate of a loss of 72 cents. In the prior-year quarter, the company reported adjusted earnings per share of 72 cents.

However, net interest expenses declined in the quarter. Interest expenses, net of amounts capitalized, improved to $118 million from $143 million in the year-ago quarter.

Quarterly revenues of $98 million missed the consensus mark of $739 million by 86.7%. The top line also declined 97.1% from the year-ago quarter. Notably, the top line was impacted by lower occupancy rates and Revpar across all regions as well as casino closures in Las Vegas.

Las Vegas Sands Corp. Price, Consensus and EPS Surprise

Las Vegas Sands Corp. Price, Consensus and EPS Surprise

Las Vegas Sands Corp. price-consensus-eps-surprise-chart | Las Vegas Sands Corp. Quote

Asian Operations

Las Vegas Sands’ Asia business includes the following resorts:

The Venetian Macao

Net revenues declined 96.7% year over year to $28 million. Casino and rooms revenues came in at $5 and $1 million, down 99.3% and 98.1%, respectively. Food and beverage, and convention, retail and other revenues declined 94.1% and 87.5% year over year to $1 million and $3 million, respectively. Mall revenues contracted 71% year over year to $18 million.

Adjusted property EBITDA during the second quarter came in at ($97) million against $336 million reported in the prior year quarter.

Non-rolling chip drop declined 99.3% and rolling chip volumes fell 98.3% on a year-over-year basis.

During the second quarter of 2020, the segment’s hotel Revpar declined 97.6% year over year to $5 million, while occupancy rates came in at 2.1% compared with 93.9% in the prior-year quarter.

Sands Cotai Central

Net revenues plunged 97.9% year over year to $10 million owing to a decline 99.7%, 100% and 95.8% in casino revenues, rooms revenues, and food and beverage, respectively. Moreover, mall, and convention, retail and other revenues declined 56.3% and 87.5% year over year, respectively.

Adjusted property EBITDA plunged 147.9% year over year to ($79) million.

Both non-rolling chip drop and rolling chip volume declined 99.6% and 100% year over year, respectively.

The Parisian Macao

Revenues amounted to ($23) million, reflecting a year-over-year decrease of 105.6%. The downside can primarily be attributed to a decline of 108.7% in casino revenues and 96.9%, 94.1%, 73.3% and 85.7%, decline in rooms, food and beverage, mall, convention and other retail revenues, respectively.

Adjusted property EBITDA plunged 158.3% year over year to ($81) million.

Both non-rolling chip drop and rolling chip volumes declined 99.5% and 90.8% year over year, respectively.

During second-quarter 2020, the segment’s hotel Revpar declined 96.7% year over year to $5 million, while occupancy rates came in at 3.5% compared with 95.8% in the prior-year quarter.

The Plaza Macao and Four Seasons Hotel Macao

Net revenues tanked 91% to $19 million owing to a 95.1%, 90%, 85.7%, 71% decline in casino, rooms, food and beverage and mall revenues, respectively.

Adjusted property EBITDA in the reported quarter totaled ($18) million, declining 121.7% on a year-over-year basis.

Both non-rolling chip drop and rolling chip volume declined 95.3% and 82.6% year over year, respectively.

During the second quarter of 2020, Revpar declined 92.7% year over year to $22 million, while occupancy rates came in at 6.2% compared with 89.9% in the prior-year quarter.

Sands Macao

Revenues were down 95.5% year over year to $7 million owing to a 96.5%, 80%, 100%, decline in casino, rooms, food and beverage revenues, respectively.

Adjusted property EBITDA in the reported quarter totaled ($31) million, declining 121.7% on a year-over-year basis.

Both non-rolling chip drop and rolling chip volume fell 96% and 82.6% year over year, respectively.

During the second quarter of 2020, the segment’s hotel Revpar declined 90.5% year over year to $16 million, while occupancy rates came in at 10.6% compared with 99.5% in the prior-year quarter.

Marina Bay Sands, Singapore

Net revenues decreased 96.7% year over year to $23 million owing to a 98.5%, 98.9%, 96.6%, 92.9% and 63% fall in casino, rooms, food and beverage, mall, and convention, retail and other revenues, respectively.

Adjusted property EBITDA in the reported quarter totaled ($113) million, declining 132.7% on a year-over-year basis.

Both non-rolling chip drop and rolling chip volumes declined 97.9% and 98.3% year over year, respectively.

During the second quarter of 2020, the segment’s hotel Revpar declined 67.6% year over year to $132 million, while occupancy rates came in at 40.2% compared with 97.2% in the prior-year quarter.

Domestic Operations

Las Vegas

Net revenues from Las Vegas operations dropped 92.3% to $36 million owing to a decline of 87.5% and 93.3% in casino, and food and beverage revenues, respectively. Rooms revenues also decreased 94.2%. Moreover, convention, retail and other revenues declined 93.5% year over year.

Adjusted property EBITDA in the reported quarter totaled ($122) million, declining 189.7% on a year-over-year basis.

Table games drop were down 80.7%, while slot handle fell 73% on a year-over-year basis.

During the second quarter of 2020, Revpar declined 77.9% year over year to $54 million, while occupancy rates came in at 33.5% compared to 97.2% in the prior year quarter.

Operating Results

On a consolidated basis, adjusted property EBITDA came in at ($547) million in the second quarter, compared to $1,266 million reported in the prior year quarter. Las Vegas operating properties, Sands Macao, The Plaza Macao and Four Seasons Hotel Macao, Venetian Macao, Sands Cotai Central, The Parisian Macao and Marina Bay Sands, all witnessed decline in adjusted EBITDA.

Balance Sheet

As of Jun 30, 2020, unrestricted cash balances amounted to $3.02 billion. Total debt outstanding (excluding finance leases) was $13.82 billion.

In the reported quarter, capital expenditures totaled $382 million. This can primarily be attributed to construction, development and maintenance activities of $337 million in Macao, $30 million in Las Vegas and $15 million at Marina Bay Sands.

Zacks Rank & Key Picks

Las Vegas Sands currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the same space includes Zynga Inc. ZNGA, DouYu International Holdings Limited DOYU and PlayAGS, Inc. AGS, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zynga has a three-five-year earnings per share growth rate of 12.5%.

DouYu International has a trailing four-quarter earnings surprise of 127.9%, on average.

Earnings in 2021 for PlayAGS are expected to surge 53.9%.

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