It has been a month since the last results report for Las Vegas Sands (LVS). Stocks have lost about 1% over the period, trailing the S&P 500.
Will the recent negative trend last until the next earnings release, or is Las Vegas Sands poised to break out? Before we dive into the recent reaction from investors and analysts, let’s take a quick look at the latest earnings report to get a better grip on the key catalysts.
Las Vegas Sands’ first quarter results beat estimates, falling year over year
Las Vegas Sands reported mixed results for the first quarter of 2021, with earnings beating Zacks consensus estimate but sales missing. While the bottom line broke the consensus mark after missing in the past three quarters, the upper result fell short of the estimate after beating in the previous two quarters. According to the results, the company’s shares fell 1.3% after close of trading on April 21.
Discussion of results and earnings
In the first quarter of 2020, the company posted an adjusted loss per share of 25 cents, which is less than Zacks’ consensus estimate of a 27 cents loss. In the same quarter of the previous year, the company had reported an adjusted loss of 9 cents per share. Interest expense (net of capitalized amounts) for the quarter was $ 154 million compared to $ 128 million for the year-ago quarter.
Quarterly revenue of $ 1,196 million fell short of the consensus mark of $ 1,281 million. The number also decreased by 15.6% compared to the same quarter of the previous year. In particular, the return on sales was influenced by lower occupancy rates and RevPAR.
Asian operations
Las Vegas Sands’ Asian operations include the following resorts:
The Venetian Macau
In the first quarter, net sales decreased 7.9% year over year to $ 340 million. Casino and shopping malls revenues were $ 266 million and $ 46 million, up 6% and 58.6%, respectively. Food and beverage sales increased 20% year over year to $ 6 million. Sales of convention, retail, other products and rooms decreased 66.7% and 9.5%, respectively, to $ 3 million and $ 19 million, respectively.
Adjusted real estate EBITDA was $ 82 million for the first quarter, compared to $ 49 million for the year-ago quarter.
The decline in non-rolling chips increased 11.1% and the volume of rolling chips decreased 45.8% year over year.
During the quarter, the segment’s hotel RevPAR declined 20.4% year over year to $ 74 million, while occupancy was 47.2% compared to 39.2% in the year-ago quarter.
The story goes on
Macau in London
During the first quarter, net revenue declined 19.4% year over year to $ 137 million, driven by declines of 26%, 29.6%, and 12.5% in casino, room, and food and beverage revenues, respectively was. However, revenue from shopping malls, conventions, retail and other areas increased 55.6% and 100%, respectively, over the previous year.
Adjusted property EBITDA was $ (23) million.
The decline in non-rolling chips was down 26.6%, while the volume of rolling chips increased 213.2% year over year.
During the quarter, the segment’s hotel RevPAR declined 9% year over year to $ 61 million while occupancy was 35.5% compared to 38.1% in the year-ago quarter.
The Parisian Macau
Revenue for the first quarter was $ 87 million, a decrease of 38.3% year over year. The downward trend was due to a 48.7% drop in casino revenue. To make matters worse, room, mall, meeting, and other retail sales fell 7.7%, 66.7%, and 50%, respectively.
Adjusted real estate EBITDA was $ (8) million compared to $ (3) million for the year-ago quarter.
Both the volume of non-rolling chips and the volume of rolling chips declined 23.1% and 94%, respectively, year over year.
During the quarter, the segment’s RevPAR hotel declined 19.1% year over year to $ 55 million. The occupancy rate was 46.7% compared to 40.3% in the same quarter of the previous year.
The Plaza Macao and the Four Seasons Hotel Macao
During the first quarter, net income increased 58.9% to $ 170 million as casino, grocery, and shopping malls revenues increased 175%, 33.3% and 139.4%, respectively.
Adjusted property EBITDA was $ 70 million for the quarter, up 150% year over year.
The decline in non-rolling chips increased 21.9% while the volume of rolling chips decreased 11.7% year over year.
During the quarter, the segment’s hotel RevPAR increased 18.9% year over year to $ 189 million while occupancy was 43.7% compared to 48.4% in the year-ago quarter.
Sand macau
Revenue for the first quarter declined 49.3% year over year to $ 35 million as casino, grocery, and convention, retail, and other revenue declined 51.6%, 50%, and 100%, respectively .
Adjusted Property EBITDA was $ (18) million for the quarter compared to $ (1) million for the year-ago quarter.
Both the decline in non-rolling chips and the volume of rolling chips declined 51.2% and 4.5%, respectively, year over year.
For the quarter, the segment’s hotel RevPAR declined 7.5% year over year to $ 99 million, while occupancy was 71.5% compared to 59.8% in the year-ago quarter.
Marina Bay Sands, Singapore
During the first quarter, net sales decreased 30.4% year over year to $ 426 million, reflecting declines of 31%, 56.8%, 19.5% and 31.3% for casino, room, Food and beverage, as well as convention, retail and other sales.
Adjusted property EBITDA was $ 144 million for the quarter, down 68.5% year over year.
Both the volume of non-rolling chips and the volume of rolling chips declined 54.8% and 48.9%, respectively, year over year.
During the quarter, the segment’s hotel’s RevPAR fell 57.7% year over year to $ 143 million while occupancy was 63% compared to 81% in the year-ago quarter.
Domestic business
Las Vegas
During the first quarter, net revenue from business in Las Vegas decreased 61.9% year over year to $ 139 million, driven by a 48% and 68% decrease in casino and food and beverage revenues, respectively. Room sales also fell by 64.6% year-on-year. In addition, revenue from conventions, retail and other areas decreased 72.1% year over year.
Adjusted property EBITDA was $ (47) million for the quarter, down 153.4% year over year.
The decline in table games was down 24.9% while the slot handle rose 3.6% year over year.
For the quarter under review, RevPAR declined 65.9% year over year to $ 79 million while occupancy was 42.6% compared to 87.2% in the year-ago quarter.
Operating results
On a consolidated basis, adjusted real estate EBITDA was $ 244 million for the first quarter, compared to $ 349 million for the year-ago quarter.
Balance sheet
As of March 31, 2021, the unrestricted cash balance was $ 2.07 billion. Total outstanding debt (excluding finance leases) was $ 14.42 billion.
For the quarter, investments were $ 291 million, thanks to construction, development and maintenance activities of $ 268 million in Macau and $ 23 million in Marina Bay Sands.
How have the estimates moved since then?
Over the past month, investors have seen a downward trend in the estimates revision. As a result of these changes, the consensus estimate has shifted by -87.1%.
VGM scores
At this point, Las Vegas Sands has a poor growth value of F, but its momentum value is doing much better with a C. In a somewhat similar route, the stock was given a D rating on the value side, placing it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregated VGM value of F. Unless you are focusing on one strategy, that value is the one you should be interested in.
outlook
Estimates for the stock largely trended downward, and the magnitude of these revisions suggests a downward shift. It’s no surprise that Las Vegas Sands has a Zacks Rank 4 (Sales). We expect a below-average return for the share in the coming months.
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