Las Vegas Sands Surpasses Q1 Expectations Due to Macau Rebound

Shares of Las Vegas Sands (NYSE: LVS) skyrocketed in the after-hours trading session on Wednesday after the casino operator released its first-quarter results that exceeded Wall Street analysts’ expectations, driven in large part by the continuing recovery in Macau.

The Venetian Macau operator posted earnings per share (EPS) from continuing operations of 28 cents on revenue of $2.12 billion for the period between January and March 2023. Analysts had predicted earnings of 20 cents per share on sales of $1.85 billion. In Macau, where its Sands China unit operates five integrated resorts, mass gaming revenue surpassed $1 billion for the first time since before the COVID-19 pandemic.

“We were delighted to see the ongoing revival now occurring in all gaming and non-gaming segments accelerate during the quarter,” CEO Rob Goldstein said in a statement. “We are deeply optimistic about the opportunity to continue investing to enhance Macau’s tourist attraction to travelers from the whole region, including foreign visitors to Macau.”

At the close of the US markets on Wednesday, Sands had an impressive year-to-date growth of 23.49%, one of the best performances among all large-cap gaming equities. Nevertheless, analysts believe the Macau rebound is in its early stages, suggesting there could be more upside ahead for the stock.

The March period marked the Special Administrative Region’s (SAR) best month in gross gaming revenue (GGR) since January 2020, making it unsurprising that Macau was a highlight in Sands’ first-quarter update.

The company’s Sands China unit achieved revenue of $1.27 billion in the January to March period, more than doubling the figure from the same period a year prior. The firm’s net loss in Macau shrank to just $10 million compared to $336 million in the year prior, further confirming the validity of the casino-gaming rebound in the area.

“Our long-term commitment to making investments that enhance Macau’s appeal to business and leisure tourists and turn it into a world center of business and leisure tourism positions us exceptionally well to deliver robust growth as visitation to the market increases and the recovery in travel and tourism spending continues,” Goldstein added in the statement.

Las Vegas Sands finished the first quarter with $6.53 billion in cash on hand and access to $2.48 billion via various credit facilities. Debt stood at $15.97 billion.

Analysts and investors are likely paying attention to Sands’ remarks regarding Macau, but Marina Bay Sands (MBS) in Singapore should not be overlooked. At this venue, one of the two integrated resorts in the city-state, Sands generated adjusted property earnings before interest, taxes, depreciation and amortization (EBITDA) of $394 million, while mass gaming revenue hit an all-time high of $549 million. Rolling volume at MBS was equal to what was seen in the fourth quarter of 2019 and the first-quarter occupancy rate was 97.6%, despite 500 rooms being closed for renovations, according to a Sands investor deck.