Majestic Research

The Morning Call

Las Vegas Sands Profits Fell 69 Percent in 2nd Quarter

By Oliver Staley | Of Bloomberg News
Published: August 02, 2007

Las Vegas Sands Corp., the world’s largest casino company by market value, said second-quarter profit fell 69 percent on costs to open its $11 billion resort in Macau, China.

Net income declined to $34.4 million, or 10 cents a share, from $109.3 million, or 31 cents, a year earlier, the Las Vegas- based company said today in a statement.

Revenue rose 19 percent to $612.9 million, beating analysts’ estimates of $571.3 million.

Revenue at the Sands Macao surged to a record as more than 2.5 million gamblers visited. The company, run by billionaire Sheldon Adelson, is building an addition to The Venetian in Las Vegas and constructing the 20,000-room Venetian Macao in China.

The first part of the new casino is scheduled to open Aug. 28.

‘’Macau has done fairly well, and the market is still continuing to grow,’’ said Matt Jacob, an analyst with Majestic Research in New York.

Shares of Las Vegas Sands rose $1.32, or 1.5 percent, to $87 at 5:02 p.m. in trading after U.S. exchanges closed. Earlier, they fell $1.57, or 1.8 percent, to $85.68 at 4:04 p.m. in New York Stock Exchange composite trading and have dropped 4.3 percent this year.

Excluding some expenses, Las Vegas Sands earned 23 cents a share. Fifteen analysts surveyed by Bloomberg estimated average earnings of 26 cents.

The company said it spent $54.4 million on interest, more than double what it spent in the year-earlier quarter. Preopening expenses were $40.3 million.

Revenue at the Sands Macao rose 22 percent to $377.4 million and climbed 14 percent at The Venetian, the company said.

Las Vegas Sands was the first U.S. casino owner to enter Macau with the Sands Macao in 2004, ending the 40-year monopoly of gambling magnate Stanley Ho. The company is also investing $2 billion in hotels and condominiums on nearby Hengqin Island.

Macau is the only region in China where gambling is legal.

Sands is building the $600 million Sands BethWorks casino in Bethlehem. Planned to open in December 2008, it will have 3,000 slot machines, a 12-story, 300-room hotel, a concert and events center and a 200,000-square-foot shopping mall. In Las Vegas, the company is building the $1.8 billion Palazzo, a companion to The Venetian, which will give it another 3,000 rooms on the Strip when it opens Dec. 20.