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twitterDespite loss, Las Vegas Sands optimistic about Las Vegas
Sands reports higher overall revenue, but says Venetian and Palazzo declined
Sun file photos
The Venetian, left, and Palazzo hotel-casinos on the Las Vegas Strip.
Published Thursday, Oct. 29, 2009 | 1:31 p.m.
Updated Thursday, Oct. 29, 2009 | 3:44 p.m.
Las Vegas Sands Corp. Financial Information
| 3Q 2009 | 3Q 2008 | % Change | 2Q 2009 | |
|---|---|---|---|---|
| Revenue | $1.14 billion | $1.11 billion | 3.2% | $1.059 billion |
| Net income | ($123 million) | ($32.2 million) | N/A | ($222.3 million) |
| Net income per share | (19 cents) | (9 cents) | N/A | (34 cents) |
Sun coverage
Las Vegas Sands Corp. on Thursday offered an optimistic outlook for Las Vegas, despite reporting a quarterly loss.
The company reported higher revenue for the third quarter and indicated revenue will be stronger ahead as its Macau business remains strong and conventioneers return to Las Vegas, but said its loss widened -- in part because of higher taxes and weaker results on the Las Vegas Strip.
The company lost $123 million or 19 cents per share in the quarter ending Sept. 30 vs. a loss in the year-ago quarter of $32.2 million or 9 cents per share. Revenue rose 3.2 percent to $1.114 billion.
Operating income of $62.4 million was up from $28.2 million in the year-ago quarter thanks to strong results from Macau, where the company said it hasn't seen any effect from reported restrictions on travel to the Chinese gaming district, and a companywide program to slash annual costs by $500 million.
Much of the loss in the 2009 quarter was attributed to an increase in income tax expense of $73.7 million.
The company also said revenue at its big Venetian and Palazzo resorts on the Las Vegas Strip, with a combined 7,100 suites, fell 26 percent to $228 million as the recession continued to hurt the U.S. gaming capital.
Las Vegas Sands executives, however, said they're seeing a turnaround in their important convention business as U.S. companies in certain industries appear more willing to spend money on travel and meetings.
Executives said the company during the quarter and in October booked 348,000 room nights at the Las Vegas properties for conventions and meetings in 2010 -- more than it expects to realize for all of 2009. That will help those convention-oriented properties withstand the December opening of MGM Mirage's CityCenter and openings of additional properties around town, the executives said.
Rob Goldstein, president of the Venetian and Palazzo, said his goal is to book 800,000 room nights for 2010. That helps the company generate extra revenue from high-yielding banquets, he said.
But room rates for those convention bookings, typically in the $200s, aren't yet as strong as during the boom years in Las Vegas in the mid 2000s through 2007.
"We do see strong bookings in 2010 and 2011 and we see demand returning,'' Goldstein said. "We believe Las Vegas is far from finished as a business destination. To the contrary, we believe Las Vegas means business.''
"We're seeing a return of demand, which is the predecessor to hopefully rate movement,'' he said.
"There is no doubt the economy is returning,'' Chairman and Chief Executive Sheldon Adelson said. "Most industries cannot operate without the need to get together to share information and do all the things that you do at conventions.''
The weak third-quarter numbers for Las Vegas were in line with results reported Tuesday by competitors Wynn Resorts Ltd. and Harrah's Entertainment Inc. MGM Mirage, another big competitor on the Strip, has not yet reported results.
Harrah's said quarterly revenue in Las Vegas was down 17.5 percent during the quarter ended Sept. 30 to $657.2 million.
Wynn Resorts reported revenue per available room of $176, down 32.6 percent from last year's quarter.
For Las Vegas Sands, casino win in Las Vegas was down 12.5 percent to $99 million in the quarter as the casinos played unlucky.
Room revenue fell 24.4 percent to $98.6 million as revenue per available room fell from $191 to $152 at the Venetian and from $218 to $153 at the Palazzo. Occupancy fell from 92 percent or greater at the properties to 89 percent at the Venetian and 88 percent at the Palazzo.
Food and beverage revenue slumped 32.1 percent to $41.8 million.
Overall, the Las Vegas operations posted a $28.9 million operating loss vs. a profit of $6.1 million in the year-ago quarter.
Elsewhere:
Net revenue at the Venetian Macao fell 5.5 percent to $493.6 million, but rose 13 percent to $280.8 million at Sands Macao and was up 37.8 percent to $67.1 million at the Four Seasons Macao and Plaza Casino.
Sands Bethlehem in Pennsylvania, which opened in May with 3,000 slot machines, posted net revenue of $63 million.
Interest expense on the company's $11.76 billion of debt was $88.5 million, down from $90.5 million in the year-ago quarter.
The company had little to say about its planned initial public stock offering of certain Asian assets on the Hong Kong Stock Market -- which may help finance further development in Macau -- and said it's on track for a first quarter 2010 opening of its $5.4 billion resort in Singapore.
Adelson reiterated the company's strategy of profiting by developing and selling noncore assets such as malls and indicated that will happen once Asian capital markets improve.
Highlighting improvements in China, he said in a statement, "We are pleased to report that our properties in Macau delivered a record performance in adjusted property EBITDAR (a profitability measure), led by healthy gaming volumes in combination with the consistent execution of our right-sizing and cost savings programs.''
Discussion: 29 comments so far…
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And why is the stock going up 12 per cent while the +Q3 loss has widened????
Boris-
Because it wasn't too far off estimates and they're reporting strong 2010 hotel bookings so far. While it still looks like recovery in Nevada is lagging behind national economic recovery, the national GDP flipped positive again for Q3 and it looks like the worst may finally be over (even for us in Nevada).
What a load of tripe. Sheldon, what about taxes in your communist chinese casinos?
Truth is, your topline is tankin', bro.
You don't advertise your moves in the Las Vegas papers, but they follow you like a hawk overseas. I heard about your chinese casinos from foreigners who were over there long before you made your announcement here.
And no, I don't own your stock. Never have. And I don't ever intend to, either.
Go cry in your beer with some of your other communist schleppers.
atdleft, thanks for your commments. Wall Streets reactions are sometimes funny. I am definetely most interested what's going to happen to CIT Bank as if they go under Chapter 11 more turmoil can be expected....
Anyway, the US GDP was so big I guess it's also mostly because of the tax stimulus and other incentives by the government. I would be extremely careful by thinking this recession is coming to an end and probably wait until summer 2010 before a real trend can be seen....
Wynn can buy them with all that Garth-Cash he's making.
Higher Taxes?? Go Figure...mmm, something we "unemployed" keep talking about that "Big Brother" doesn't get it...I agree with Boris, wait till summer 2010 to see if we are on receover mode..right now, it's all hype and PR..we may be back as far as wall street goes, but with out employment - it won't matter at all...
Does this mean for layoffs for employees of Venetian and Palazzo?
Its a simple fact! Guys like Steve Wynn have ruined Vegas.
How is the room tax revenue doing?
MGMM stock also up strong. Anticipation of CC?
burnemandturnem - up strong??? what are you smoking?
It's all over Sheldon, admit it you got too greedy.. bet you wish the good 'ol Sands was still standin there all paid for and generating all that low overhead and profit!
These are the same FOOLS who tore down the old Sands...what idiots...they could still have made money there , a lot of people liked the place...Morons....hope you loose it all along with Wynn...your the knuckleheads that ruined Vegas !!!!!!
conference call was great. LVS is booking strong convention/group business for 2010. This is despite Obama's negative comments about Las Vegas. Even a financial firm booked for 2010. Vegas is on the road to recovery - although it will probably be very slow. Job growth should return in early 2010.
No way is Las Vegas recovering in 2010. With the over supply of rooms and the recession/depression still with us ( don't care what guys like Geitner and co tell us) we are not coming back till 2012 which just happens to be the Presidential election .
Bill-Owl, how did Wynn ever destroy Las Vegas. What I think is that you don't get the idea of business and expanding to attract a larger portion of the market. Do you actually think that tourists would come to Vegas to see the same hotels and casino's they saw 50 years ago? You say they want to have fun do you think they had night clubs back in Sinatra's days. Nothing much else has changed but the size and cost of these buildings. I have to admit Adelson is a bigger fool than all the others gathering so much debt. Also maybe you haven't heard about the bad economy. Maybe I should explain it to you. Maybe if half of America wasn't dumb enough to buy a 500k house with a 50k household income and the banks actually let them do it, all of this wouldn't have happened. But since it did happen it caught all these debt loaded companies off guard. How is a company suppose to get a profit when it has 10 billion dollars of debt and when they're paying so much interest per quarter. And how could I forget those 5 million dollar bonusses to all the execs. Las Vegas resort companies have to smarten up like most have and then bill_owl you might get what you want. You might not see anything change on the Strip for 10-15 years.
Don't look for a Las Vegas recovery in 2010. It's not gonna happen. Unemployment is high & people don't have discretionary income to gamble with. If people are gonna gamble-they'll gamble at a local Casino near their home & forgo a trip to Vegas. As for the stocks-take your profits while you've got them because they're going to eventually dump again.
Late today Sands declared a quarterly dividend payment of $2.50 per share on its 10% Series A Cumulative Perpetual Preferred Stock.
That stock is only for the big wigs in the corporation NOT the public.
So no matter what happens with this company the big wigs make out sweet.
How lame.
I guess they need the money to keep their botox shots current and their fat wives in the gym.
Don't believe the LVS execs, they lie to keep their cushy jobs. I believe that makes 8 or 9 straight quarterly loses, yet they still hand out million dollar a year contracts to themselves. Such a sad joke!!
It is ironic that the casino operators now feel that conventions and group business will be the salvation...a few years ago they did not want conventions. Steve Wynn did not want the guests wearing name badges, admitting that there were actually conventioneers staying in his rooms. Mr. Goldstein has set the goal of 800,000 room nights or one-third of their inventory for convention business. And what does the Las Vegas Convention and Visitors authority do other than approve a huge expenditure for R&R Advertising...what happens in Vegas...who cares what happens - spend some of that ad money on the soliciting of conventions and trade shows...the owners and operators are saying this is their new goal...one-third of 150,000 rooms for conventions...50,000 occupied rooms each week...how come casino people are slow to grasp this concept...How do you fill 7100 rooms at the Venetian and Sands with table game customers...there are not that many of them that exist. R&R should be re-examined...it is a joke the fees they make...
Looks like Sheldon Adelson is not like his arch enemy, greedy Steve Wynn. While Wynn whines like a baby about how Obama ruined the economy of Vegas and Wynn also bypasses what his idiot hero, Bush, did in the 8 years before Obama, to the economy,Adelson is positive that Vegas will be OK even though the economy has resulted in The Sands Corp. losing some money.
Never thought I'd praise hardball Adelson but compared to Wynn he's a saint.
All you hopeful for recovery bloggers out there are living in the past. Not so long ago Vegas was unique because you could get a room dirt cheap, free drinks and good food around the clock for next to nothing. Everyone was welcome. Conventioneers, world wide tourists, average folks from middle America, Upper Crust people, pimps, whores, strippers, hard core gamblers, wanna be gangsters, (and a few real ones) celebrities, cowboys and Elvises! This was what made this place different than ANY place in the world. Now unfortunately it's just like everywhere else, and all those colorful folks would rather just stay home..PITY.. Casino owners listening here?
The casinos should put in a 99 cent store. That will bring them in.
I am glad Las Vegas has Downtown and the Strip.
Downtown is the old Las Vegas
The Strip is disneyland.
For all you experts,is downtown or the strip making more money on gambling?
Wolf85023 : I believe that any question asked is a valid one if the person asking it might have something to gain from it, Of course NOT! The sheer volume and size of the properties on the strip are bringing in more money than the small places downtown, however proportionately speaking, the downtown properties are enjoying their financial positioning in the marketplace because of their comparably low overhead, and the fact that most of these places were long ago paid for. They are hurting as well however due to the loss of their patrons to the out of state Indian Casinos, much like Stateline is suffering for the same reason. The low rollers that used to be the core of the Stateline and downtown visitor are staying in California and going to San Manuel, Pala, Agua Cailente, and the others around the inland empire areas.
wynnchairman: People are glad to come here and see the new places over the old ones, however with the new places came the high prices, and complete break down of the system that drove this town, that of the value vacation, loose slots, cheap rooms, quality inexpensive food, and comps, etc. These new places need to somehow get that happening again or they are going to be bankrupt. It's that simple.
SHELDON ADELSON IS A REAL WINNER - WITH VERY CREATIVE VISIONARY SKILLS !!!! -- HE MAY LACK PEOPLE PERSON SKILLS - BECAUSE HE IS VERY FOCUSED & HIS ATTENTION SPAN IS PROBABLY VERY LIMITED WITH PEOPLE - THAT DO NOT AGREE WITH HIM !!! --- HE NEEDS A STRATEGIC PARTNER WITH VERY DEEP POCKETS - TO PROVE TO THE WORLD HE IS RIGHT ON THE MONEY WITH HIS DREAMS - OF BUILDING THE COTAI STRIP TO MIRROR THE LAS VEGAS STRIP !!
EVENTUALLY HE WILL PROBABLY BE ONE OF THE RICHEST MEN IN THE WORLD AGAIN - OVER THE NEXT TEN YEARS !!!
SHELDON ADELSON HAS A COMBINATION OF INTELLECT - ACADEMICS - STREET WISDOM - CREATIVE DREAMING & THE FIRE IN HIS BELLY - TO BE THE BEST & THE BIGGEST IN THE HOTEL CASINO BUSINESS !!!
HE HAS SURPASSED STEVE WYNN BECAUSE OF THE ABOVE & MR ADELSON CAME FROM A VERY POOR BACK GROUND & MET ALL OF THE FINANCIAL CHALLENGES - POOR BOYS FACE - JUST LIKE KIRK KERKORIAN'S BACK GROUND !!!
SHELDON ADELSON IS DIFFERENT - BECAUSE HE HAS ALL OF THE ABOVE GIFTS & THE OTHERS ONLY HAVE SOME OF THE ESSENTIAL QUALITIES !!!
I HAVE STUDIED ALL OF THEM INCLUDING JAY SARNO - WHO CREATED CAESARS PALACE IN 1966 - WHICH IS A MEGA THEME RESORT THAT WILL ALWAYS BE ONE OF THE GREATEST OF ALL TIME !!!
I WILL HOPEFULLY CREATE A MEGA RESORT ON THE LAS VEGAS STRIP & PER HAPS ON THE COTAI STRIP - OVER THE NEXT FIVE YEARS - THAT WILL RIVAL ALL OF THE CURRENT GREAT MEGA STRUCTURES & BE CONSIDERED THE LAST WORD IN GLAMOUR - ENTERTAINMENT - PRESTIGE- STAUS & SNOB APPEAL !!!
THE KEY TO MY VISION & DREAMS ARE ALSO FINDING THE RIGHT STRATEGIC PARTNER OR PARTNERS !!!
LAS VEGAS WILL COME BACK SLOWLY OVER THE NEXT FIVE YEARS & THE CREATIVE ENTREPRENUERS - WHO BUY NON PERFORMING HOTEL CASINOS NOW AT A DEEP DISCOUNT WILL BE VERY AHEAD OF THE CURVE !!!
HOWARD HUGHES UNDERSTOOD THE CONCEPT BACK IN 1966 & HAD BOB MAYHEW BUY UP HOTEL CASINOS ON THE STRIP - & CALLED THEM HIS TOYS !!!
HOWARD HUGHES IS THE REAL LAS VEGAS & NEVADA VISIONARY !!! -- HOWARD HUGHES WAS WAS A BILLIONAIRE WHEN PEOPLE DID NOT EVEN NO HOW TO PRONOUNCE THE WORD!!! - KIRK KERKORIAN ALWAYS WANTED TO BE LIKE HOWARD HUGHES & EMULATE HIM WITH NAMING HIS AIRLINE -- TWA A CARGO AIR LINE & BUY USING HOWARD HUGHES FAMOUS LAWYER GREG BAUTZER ESQ.--
I ALSO ADMIRE HOWARD HUGHES VISIONARY BUSINESS SKILLS & HAVE STUDIED HIM ALSO !!!
SMART PEOPLE LEARN FROM HISTORY - IF THEY WANT TO BUILD A BETTER MOUSE TRAP !!!
RESPECT SUCCESS & ASK YOUR SELF - CAN YOU DO BETTER & CREATE A VERY COMPELLING MEGA THEME RESORT - THAT WOULD FINANCIALLY MAKE GOOD BUSINESS SENSE- TO STAND THE TEST OF TIME - JUST LIKE CAESARS PALACE HAS SUCCESSFULLY DONE !!!
CAESARS PALACE IS MY FAVORITE THEME & JAY SARNO WAS A VERY CREATIVE MARKETING GENIUS THAT NEEDED A STRATEGIC PARTNER TO TURN HIS DREAMS INTO A REALITY & HE FOUND ONE !!!
Is is just me, but do the Venetian and Palazzo have kind of a cheap perfume STINK that is sprayed all over?