Las Vegas Sands misses earnings estimates on Macau slump

[LOS ANGELES] Las Vegas Sands Corp, the world's largest casino operator, reported first-quarter revenue and earnings that missed analysts' estimates after gambling shrank in the key markets of Macau and Singapore. The stock dropped.

The casino company, founded by billionaire Sheldon Adelson, reported profit fell to 66 cents a share, excluding items, according to a statement Wednesday. Analysts projected 72 cents, the average of 15 estimates compiled by Bloomberg.

Las Vegas Sands, like other casino operators in the Chinese enclave of Macau, has seen a sharp decline in betting from high- rollers. President Xi Jinping's crackdown on corruption has led many wealthy Chinese to cut back on conspicuous consumption. Revenue shrank 25 per cent to US$3.01 billion, the company said, missing estimates of US$3.19 billion.

"We're in uncharted waters," Mr Adelson, the company's chairman and chief executive officer, said on a conference call. He declined to predict when the slump will end.

Las Vegas Sands fell 4.2 per cent to US$54 in extended trading after results were announced. The stock gained 1.7 per cent to US$56.39 at the close in New York and is down 3 per cent this year.

Betting in Macau, the only place in China where casino gambling is legal, fell 37 per cent in the first quarter to 64.8 billion patacas (US$8.1 billion). Las Vegas Sands derived 64 per cent of revenue there last year, according to Bloomberg data.

Rob Goldstein, president, said on the call that Las Vegas Sands was looking to cut costs, including non-essential capital spending. The company finished the quarter with US$2.41 billion in unrestricted cash and US$9.24 billion of debt.

Adelson said he saw little chance the Macau government would impose an annual cap of 21 million visits by mainland tourists, the number that came last year, as reported by Macau Business Daily. Such a move would devastate the enclave's emerging convention and meeting business, he said.

Las Vegas Sands halted stock repurchases in the first quarter to maintain its dividend and conserve cash, potentially for investment in a new casino market, Adelson said. The company's US$2.7 billion Parisian resort in Macau is scheduled for a mid-2016 opening, he said.

BLOOMBERG