Las Vegas Sands Q4 profit misses, but Adelson sees signs of stabilization

Las Vegas Sands posted weaker-than-expected Q4 results as the downturn in Macau continued to weigh, though chairman Sheldon Adelson said the situation there was stabilizing and held out hope for an earlier than anticipated opening for the company’s Parisian resort.

Net revenue for the fourth quarter of 2015 decreased 16.2 percent to $2.86 billion, compared to $3.42 billion in the fourth quarter of 2014, missing the consensus forecast for $2.9 billion.

Consolidated adjusted property EBITDA of $1.05 billion decreased 21.9 percent in the fourth quarter of 2015, compared to the year-ago quarter.  

Adjusted net income decreased to $492.4 million, or $0.62 per diluted share, compared to $734.2 million, or $0.92 per diluted share, in the fourth quarter of 2014. That misses the consensus estimate of $0.64.

At Sands China, net revenues decreased 21.7 percent to $1.66 billion, while net income dropped 29.3 percent to $378.4 million.

In Singapore, Marina Bay Sands’ results were held back by the impact of the stronger U.S. dollar. It said a low win percentage on table games play also negatively impacted reported financial results.

The property generated adjusted property EBITDA of $338.2 million. On a hold-normalized basis, adjusted property EBITDA was $374.8 million. On a constant-currency basis, hold-normalized adjusted property EBITDA decreased 10.1 percent.

On a conference call with analysts, Adelson said the company’s new Cotai resort, The Parisian, is scheduled to open in September, though he hinted it may have an earlier soft opening.

“I’d be surprised if the Parisian doesn’t do well out the gate,” he said.

He also said that the mass market in Macau appears to be stabilizing.

Bernstein analysts said the results were better than they had been expecting.

“The company has delivered its highest EBITDA margin in recent years. The Mass business is beginning to show signs of potential stabilization and business mix continues to move into higher margin areas away from low margin junket VIP,” it said in a note.  “More important than the backward-looking numbers, investors are more focused on signs (such as recent GGR trends) that may suggest some fundamental bottoming for the overall gaming sector.”