Las Vegas Sands Reports First Quarter Declines Despite Growth within the U.S. | PokerNews
The Las Vegas Sands released its first quarter earnings for 2016 to its investors, and, to little surprise, revenue operating income, and net income are all down compared to the similar period a year ago.
The company is the landlord of Las Vegas strip casinos The Venetian and The Palazzo, the Sands Casino Resort Bethlehem, and several other casino resorts in Macau, China, and Singapore, Philippines.
Net revenue for the gang dropped a staggering 9.8 percent from $3.01 billion within the first quarter of 2015 to $2.72 billion within the first quarter of 2016. That is despite showing healthy gains for its U.S. holdings with net revenue from its Las Vegas properties increasing by 2.3 percent ($384.9 million Q1 2016 vs. $376.4 million Q1 2015) and net revenue from the Sands Bethlehem increasing by 8.6 percent ($138.7 million Q1 2016 vs. $127.7 million Q1 2015).
The picture becomes worse when taking a look at operating and net income, since fixed costs didn't decline although the revenue driving the corporate did.
Operating income for the gang decreased by 17.6 percent from $711.1 million within the first three months of 2015 to $585.6 million within the first quarter of 2015. As was the case with revenue, the U.S... properties performed well, with the blame for the decline being on poorer performance from the properties in Asia.
Big Decline from Singapore
One of the most important drivers to this decline for the gang was a 41.7-percent reduction in operating income for the quay Bay Sands in Singapore from $319 million within the first quarter of 2015 to $186 million within the first quarter of 2016. The crowd primarily blames the decline on strengthening of the U.S... Dollar in comparison to the Singapore Dollar, together with low win percentage on rolling chip play.
Net income for Las Vegas Sands declined by a large 37.5 percent from $511.9 million within the first quarter of 2015 to $320.2 million within the first quarter of 2016. This contributed to an identical decline in diluted earnings per share, something very noteworthy to investors, from $0.64 per share in Q1 2015 to $0.40 per share in Q1 2016.
Despite the lower diluted earnings per share, the corporate increased the quantity paid to investors in dividends by 10.8 percent in comparison to the primary quarter of 2015 to $0.72 per share.
Less Net Income from Macau, Too
In addition to showing a worse performance in Singapore, the corporate also contributed less net income from its Macau-based properties to boot. That is of little surprise considering all the casino industry within the city have been experiencing declines each month for just about two years after experiencing years of growth within the region.
Online gaming adversary and Chariman and CEO of the Las Vegas Sands Sheldon Adelson explained to the company's investors there are signs of stabilization in Macau.
"The operating environment in Macau remained challenging in the course of the quarter; but we do see signs of stabilization, particularly within the mass market," Adelson stated.
Regardless of the declines experienced throughout the first quarter of 2016 and the massive $9.51 billion debt as of March 31, 2016, the corporate appears to still be strong with net positive results and $1.70 billion in cash to be had. The corporate looks to expand into the longer term with capital expenditures through the first quarter of 2016 totaling $343.6 million, with probably the most notable investments happening in Macau where they invested $307.3 million into town primarily for The Parisian Macao, that's expected to open its doors over the summer.
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