Las Vegas Sands, the casino company that runs the Venetian and Palazzo on the Strip, reported its first-quarter earnings today.
Company: Las Vegas Sands Corp. (NYSE: LVS)
Revenue: $3.01 billion, down 24.9 percent from the first quarter of 2014.
Earnings: $511.9 million, down 34 percent from the same time period a year ago. The company attributed the decline to “softer results” across its portfolio in Macau, the Chinese gambling hub where Las Vegas Sands is heavily concentrated.
Earnings per share: 64 cents, compared to 95 cents a year earlier.
What it means: The Macau casino industry has continued to suffer amid a crackdown by the Chinese government on corruption that experts say has kept many high-rollers away. March was the market’s 10th consecutive month of year-over-year declines in gaming revenue.
That’s been tough for Las Vegas Sands, which controls four properties there and is building more. The company’s Chinese subsidiary reported revenue of $1.77 billion for the quarter, down 34.9 percent from the year before. Its net income dropped 54.2 percent to $344.7 million.
Still, Sands CEO Sheldon Adelson remained confident about Macau in a conference call with analysts, declaring that the company delivered strong results there in the face of ongoing challenges. He was optimistic, even while admitting that he can’t say with certainty whether the market’s downturn has hit its bottom yet.
“Our job is to set the right strategy so that we can grow and prosper for the long term, in spite of the current challenges,” Adelson said. “I am today as confident as I have ever been in the long-term outlook for the Macau market.”
Adelson emphasized Sands’ commitment to building new projects in Macau that offer a “winning formula” for accommodating tourism growth while mitigating the impact on locals. He also promised to keep being a “pioneer” in diversifying Macau’s economy beyond gambling and investing in training the local workforce.
“Our track record at being transformative pioneers in multiple jurisdictions speaks for itself. But don’t forget, also, our track record of staying the course,” he told analysts. “We have been tested by much stormier weather in our company’s history.”
In Las Vegas, the Venetian, Palazzo and Sands Expo and Convention Center reported net revenue of $376.4 million for the quarter, down 1.6 percent from the year before. Adelson welcomed the new president of those properties, George Markantonis, who started earlier this year.
“We believe there is significant opportunity to improve our performance here in Las Vegas, and George is going to be an integral part of that effort,” Adelson said.