Majestic Research

Reuters

Las Vegas Sands 2nd-Qtr Profit Rises 27 Pct

By Deena Beasley
Published: August 02, 2006

LOS ANGELES, Aug 2 (Reuters) - Casino operator Las Vegas Sands Corp. said on Wednesday that its second-quarter profit rose 27 percent, as stronger earnings at its Macau casino offset weaker results in Las Vegas.

The company attributed the weakness in Las Vegas to gamblers’ good luck, higher payroll and benefit costs as well as stock option expenses.

Las Vegas-based Sands said net income rose to $109.3 million, or 31 cents a share, from $86.4 million, or 24 cents a share, a year earlier.

Sands operates the Venetian resort and the Sands Expo and Convention Center in Las Vegas, and a casino in the Chinese gambling enclave of Macau, which opened in May 2004.

“We don’t see anything interrupting the growth trend we have seen for years in Vegas,” Chairman and Chief Executive Sheldon Adelson said on a conference call.

First-quarter Macau operating income rose 36 percent to $101.6 million, while Las Vegas operating income fell 17 percent to $42.8 million.

“Sands had some of the weak trends that we saw in Las Vegas for the second quarter, but there were some mitigating factors,” said Matthew Jacob, an analyst at Majestic Research, which does not own the stock or conduct investment banking.

The Venetian’s hotel revenue rose 6 percent to $88 million, while food and beverage revenue rose 27 percent to $35.2 million and convention and retail revenue rose 24 percent to $28.3 million.

The company said it added 400 employees to the Venetian in the second quarter, bringing the total to 6,000, as it opened new amenities including a theater showing “The Phantom of the Opera.”

The company’s revenue for the quarter rose 29.6 percent to $517 million.

Excluding one-time items, Sands earned 34 cents a share, matching the average analyst estimate, as compiled by Reuters Estimates.

In Macau, Sands is developing a Venetian resort.  In Las Vegas, it is building a $1.6 billion casino resort, the 3,000-room Palazzo, next to the Venetian, which it said is on track to open in the third quarter of 2007.

In addition, Sands was the winning bidder for a $3.6 billion casino project in Singapore and has applied for a license to operate a casino in Bethlehem, Pennsylvania.

The company’s shares fell 2.6 percent to $63.58 in after hours trade.  They are up more than 60 percent this year, outstripping a 10 percent gain for the Dow Jones U.S. Gambling Index <.DJUSCA>.