Las Vegas Sands' Earnings Show Recovery in Macau
Las Vegas Sands is still losing market share in Macau, but it's slowed the bleeding in recent months.
Las Vegas Sands Corp (NYSE:LVS) has been losing market share for the past year to Wynn Resorts (NASDAQ:WYNN) and Melco Resorts (NASDAQ:MLCO), who are more focused on the booming VIP market. But in the fourth quarter, the company took some of that momentum back and grew revenue at an impressive clip in Macau.
There were some ups and downs, as usual, but overall there was some solid progress for Las Vegas Sands in the fourth quarter. Here's a look at the highlights.
Macau got hot in 2017
We know that Macau's gaming revenue jumped 19% in 2017 and 20% in the fourth quarter. That's the bar against which we should judge all casino performance.
Below is a look at the volume of gambling at Las Vegas Sands' main resorts in Macau, which is the best way to judge gaming market share because it takes out the element of luck. Rolling chip volume measures VIP play, and nonrolling chip volume measures mass market play.
Rolling Chip Volume/
Change YOY
Nonrolling Chip Volume/
Venetian Macau
Sands Cotai Central
(16.7%)
Four Seasons Macau
Sands Macau
Data source: Las Vegas Sands Q4 2017 earnings release.
You can see that nonrolling chip growth was strong and exceeded the 19% growth in mass market play overall in the quarter. That's a good sign for Las Vegas Sands' casinos.
The VIP segment struggled compared to the 27% rise in VIP play in the fourth quarter, but that's to be expected because Wynn Palace and Melco's City of Dreams cater more to high-rollers.
Overall, Las Vegas Sands may have lost a little market share in the fourth quarter, but it stopped the bleeding that had taken place the last few quarters.
Marina Bay Sands is on a lucky streak
In Singapore, Marina Bay Sands saw a 4% decline in rolling chip volume to $7.92 billion and nonrolling chip volume fall 2.7% to $925 million. But a lucky streak meant casino revenue actually jumped 16% to $652 million.
In total, Marina Bay Sands generated $825 million in revenue and $456 million in adjusted EBITDA, up 14% and 25%, respectively.
Las Vegas continues its steady ways
The Venetian and Palazzo Las Vegas haven't been growth properties for years, but they're steady cash generators. In the fourth quarter, revenue was up 2.4% to $422 million on strong food, beverage, and convention growth. Adjusted EBITDA also rose 2.7% to $114 million.
The best reason to own Las Vegas Sands stock
Las Vegas Sands did continue its $0.73 per share dividend payment, which may be the best reason to own the stock. The company doesn't have any major construction projects, so it's using most of its cash flow to buy back stock and pay out dividends to shareholders. That may not be the exciting investment thesis gaming companies have traditionally had, but the 3.9% dividend yield from a cash flow machine is a great reason to own this stock long-term.
NYSE:LVS
MLCO
Melco Resorts & Entertainment
NASDAQ:MLCO
NASDAQ:WYNN
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