It’s the so-called "quiet period" for executives of the Las Vegas Sands Inc., owner of The Venetian Resort, because of a pending initial public offering, so there was little explanation last week when the company reported a loss for the third fiscal quarter of 2004.
Cited as the principal reason for the loss was the incentive payments and stock options granted to the company’s leaders. This amounted to $62 million for incentive payments and $49 million in stock options. So for the quarter, the company posted a loss of $85.9 million compared to the $21 million profit earnings during the third quarter of 2003.
Complying with an edict from the Securities and Exchange Commission, the company could not comment on the incentive payments and stock options, but more information will probably become available when the IPO is instituted. The company expects to raise about $575 million in its initial stock offering.
From an operational point of view, the third quarter was a major success with revenue more than doubling to $240.2 million while revenues from the hotel end reached $71.6 million, a 6% increase. However, expenses rose dramatically because of the money spent on the opening of the Sands Macau Casino.
Las Vegas Sands is building a Venetian-styled hotel/casino in Macau and has begun construction of its 3,000-room Palazzo resort next to The Venetian in Las Vegas.
MTR Gaming Group
In the wake of an announcement by Harrah’s Entertainment Inc. (HET) that it will pass on a second year option to operate Binion’s Horseshoe Casino in downtown Las Vegas next year, MTR Gaming Group Inc. (MNTG) reported flat earnings for the third quarter of the current fiscal year.
Revenues for the period that ended on Sept. 30 were $85.2 million with net income of $5.9 million or $0.20 per share. This was almost identical to last year when revenues reached $84.1 million and earnings amounted to $6 million or $0.21 per share.
Of the amount reported, the company said Binion’s contributed $647,000 in revenue. Come next March, the company hopes to build on the progress made by Harrah’s which took the bankrupt and closed Binion’s Horseshoe Hotel/Casino and gained national attention for the property with its World Series of Poker.
Under the brokered agreement, the final two tables of the 2005 World Series of Poker will be held at Binion’s.
"We’re looking forward to bringing Binion’s back to its world-class status," said Ted Arneault, president and CEO of MTR Gaming. He also praised Harrah’s for "bringing it (Binion’s) from ground zero to where it is today."
Isle of Capri
Increased overhead for international and domestic development was one of several reasons given for a troubled fiscal quarter for Isle of Capri Casinos Inc. (ISLE) that ended on Oct. 24.
Actually net revenues remained comparable to the same fiscal period in 2003 at $269.7 million but net income fell from $10.7 million to $0.5 million. As related to earnings per share, the 2004 figure was $0.01 per share as opposed to last year’s $0.35 per share.
Other overhead expenses, the company said, were related to construction costs in Colorado and weather disruptions in the Bahamas and to the casinos along the Gulf Coast in Mississippi.
The company announced that it has developed an agreement to purchase the Miami Jai-Alai facility should Florida permit video lottery machines to be installed at horse and dog tracks and jai-alai frontons. The property is owned and operated by Florida Gaming Inc. There are several challenges to the most recent balloting still pending. If they are resolved successfully, the residents of the affected areas will be asked to vote on permitting slot machines next November.