Las Vegas Sands Corp. gets 4Q boost from China

Jan 31, 2013 9:14 AM

Las Vegas Sands Corp., the casino company run by billionaire CEO Sheldon Adelson, said its fourth-quarter net income soared more than 35 percent as it won big in China.

The world’s biggest gambling market is found in Macau, the only place in China where gambling is legal. Las Vegas Sands and other casino operators have flocked to the region, known both for its high-roller gamblers and a growing base of middle-class Chinese who have begun to frequent the casinos.

The company reported Wednesday that it had 11 million visitors to its four Macau properties during the fourth quarter alone. It also operates The Venetian and the Palazzo in Las Vegas, the Sands Bethlehem in Pennsylvania and the Marina Bay Sands in Singapore. The Asian gambling hub has quickly eclipsed Las Vegas as the key to its success and helped offset weak performance in its non-Chinese markets.

Adelson touted a jump in revenue from his Macau shopping outlets.

“We believe our Asian mall retail outlets are among of the most valuable retail assets in the world,” he said.

Las Vegas Sands reported after the market closed that it earned $434.8 million, or 53 cents per share, for the quarter. That is up from $320.1 million, or 39 cents per share, earned in the same quarter last year. On an adjusted basis it earned 54 cents per share versus 57 cents per share. Its net revenue increased almost 21 percent to $3.08 billion from $2.54 billion.

Executive Vice President Rob Goldstein sought to allay concerns about a few big payouts the company’s casinos made to gamblers.

“The math is the math is the math, and in the end, those people who won some money will come back and lose it back,” he said.

“If you have a lot of Asian people spending a lot of money for a lot of time you’re going to do just fine,” he later added.

Analysts polled by FactSet were expecting the company to earn 60 cents per share on revenue of $3.02 billion, on average.

Sands China Ltd., its majority-owned subsidiary in Macau, reported a profit gain of 52 percent and its revenue increased 48 percent to $1.97 billion.

For the full year, net income increased to $1.52 billion, or $1.85 per share, from $1.27 billion, or $1.56 per share, in 2011. It earned $2.14 per share for the year on an adjusted basis, versus $2.02 in the prior year. Revenue increased to $11.13 billion from $9.41 billion.

The company also said it will pay a quarterly dividend of 35 cents per share starting in March, up 10 cents, or 40 percent, from its prior rate.

Shares of Las Vegas Sands jumped $2.79, or more than 5 percent, to $54.35 in after-hours trading after adding 48 cents to $51.56 during regular trading.

Adelson acknowledged that his U.S. casino-resorts may have become secondary to the Macau properties.

“We are of the opinion that a lot of the U.S. markets have been over-saturated or are about to be over-saturated. We keep our eye open but we don’t want to compete with the job that Caesars is doing in the riverboat market and the small casino market out there,” he said.

Adelson said he would be reluctant to sell any domestic properties because that might give a competitor a chance to grab a share of the convention business he is widely credited with pioneering.

“That is very critical to us, and we sell all off any of our properties, someone is going to learn to make the key to our kingdom,” he said.

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