Results

Las Vegas Sands stock jumps higher on Asia update after Q2 earnings

By Ryan Butler - 20 Jul, 2022

Las Vegas Sands stock spiked as much as 5% after regular New York Stock Exchange trading hours Wednesday following promising reports that Covid-19-related restrictions in Asia would be subsiding.

The Las Vegas-based company is more heavily dependent on Asian markets than nearly every other US-based gaming company, especially after selling management rights to its last remaining American casino properties, the Venetian and the Palazzo, last year. More than two years of uncertainty around the Chinese government’s pandemic-related restrictions have been further exacerbated in recent weeks by another casino shut down in Macau.

The company operates six properties in Macau as well as the Marina Bay Sands in Singapore.

“While pandemic-related restrictions continued to impact our financial results this quarter, we were pleased to see the recovery in Singapore accelerate during the quarter, with Marina Bay Sands delivering $319m in adjusted property EBITDA,” CEO Robert G. Goldstein said in a statement announcing the company’s Q2 earnings.

“We remain enthusiastic about the opportunity to welcome more guests back to our properties as greater volumes of visitors are eventually able to travel to both Singapore and Macau,” he added.

Net revenue for Las Vegas Sands in Q2 was $1.05b, blowing past industry consensus estimates of roughly $950m. The company reported $1.17b in net revenue for Q2 2021.

Earnings per share were below the consensus estimate of roughly ($0.28).

Operating loss was $147m, compared to $139m during Q2 2021. Net loss from continuing operations in the second quarter of 2022 was $414m, compared to $280m in the second quarter of 2021.

Las Vegas Sands stock was up more than 4% during regular trading hours Wednesday on a solid day for US markets overall.

Following a recent Covid-19 outbreak, the Chinese government forced Macau casinos to close until at least this upcoming weekend, the company reaffirmed in its Q2 earning’s presentation.

Prior Covid-19 mitigation measures in China during the most recent quarter also “produced a significantly more challenging operating environment,” the company said in an investor presentation document released Wednesday. Market-wide visitation was approximately 16% of the figures recorded for the quarter ending June 30, 2019.

“We remain confident in the recovery of travel and tourism spending across our markets,” Goldstein said in a statement. “Demand for our offerings from customers who have been able to visit remains robust, while pandemic-related travel restrictions continue to limit visitation and hinder our current financial performance.”

The company is the first major US casino operator to report Q2 earnings this year. Wednesday’s jump could be good news for other US companies with large Asian presence, including Wynn and MGM.