LVS 3Q REPORT CARD

In an effort to evaluate performance and as a follow up to our YouTube, we compare how the quarter measured up to previous management commentary and guidance

OVERALL

  • BETTER: LVS reported a solid beat on the back of better margins in Macao driven by stellar growth on yielding up mass win per table. On the capital side, LVS raised their dividend and bought back a lot of stock. What's not to like? 

SCC MASS

  • BETTER:  Mass win per table per day increased 117.7% YoY while mass table, slot and ETG win per day climbed to $4.3 million, an increase of 174.3% YoY, significantly beating estimates.  In the spring, they will bring 75 more mass games.  SCC still has room to grow. 
  • PREVIOUSLY: 
    • "SCL mass table games has grown 60% in the last year to $920 million from $577 million a year ago in this segment and the margin is still mid-40s, 45%, 46%, 47%."
    • "Upside in this segment comes from the organic growth in the Macau market, specifically in Cotai, our ability to leverage our hotel and retail asset base in Macau and in Cotai, in particular, to drive much higher win per unit, we're just in a unique position to improve dramatically and see SCL's mass table growth grow to $4 billion to $5 billion, $6 billion years ahead."

FOUR SEASONS PREMIUM MASS

  • BETTER:  Over 60 tables now in the premium mass segment at Four Seasons.  Four Seasons mass drop was outstanding, up 146% YoY - blowing away estimates.
  • PREVIOUSLY:  
    • "As we move more into this premium mass business there, I think the numbers will get better and the hold percentage will be what it's going to be. We know with that kind of volume, the hold percentage pretty much stays flattish when it's all said and done."

DIVIDENDS/STOCK BUYBACK

  • BETTER:  Recurring annual dividend will be increased to $2.00 per share, or $0.50 per quarter, for FY 2014, an increase of 42.9%.  LVS repurchased approximately $299.6 million of common stock (4.6 million shares at a weighted average price of $65.18) during 3Q.  In the future, they expect to buy back >$75MM/month until the remaining $1.65BN authorization is used up.  
  • PREVIOUSLY:  
    • "We publicized last year that our dividends would increase by a minimum of 10% per year, most of the market expectations are that we'll do actually more than that. But there is a dividend bias in the company to continue to increase the yield on our stock, the stock has gone up, so that means we have to increase our dividends to keep the yield at where it should be. We have announced a $2 billion buyback of stock. We are progressing with that buyback and we'll continue to do that until the $2 billion is taken care of."

PARISIAN

  • LITTLE BETTER:  Based on current schedule, LVS is targeting a late 2015 opening, but may be able to open a few months ahead of schedule.  Expect building permit will be given on a timely basis.
  • PREVIOUSLY:  
    • "Based on our current construction schedule, and subject to timely government approvals, we are targeting the opening of the Parisian Macao for late 2015."

SINGAPORE RC VOLUME

  • SAME:  RC volume rose 17% to $13.8BN.
  • PREVIOUSLY:  "We've been pretty consistent in the range of $12 billion to $16 million roll per quarter. I think that will remain intact for the foreseeable future."

LAS VEGAS

  • SAME:  3Q EBITDA of $87.1MM was in-line with expectations.  Table games drop decreased 6.4%
    to $544.3 million reflecting lower baccarat drop.  Slot handle both grew 2.6% YoY.
  • PREVIOUSLY:  
    • "On the gaming side, we are very dependent on high-end premium Asian players who come here. And although we've participated, we've done very well in that segment, we're happy to be in it, the entire town doesn't share equally in that.  Slot and mass tables continue to be mediocre. I wouldn't call it a head fake as much as it's just a challenging market that will slowly get better, but I wouldn't look for rapid improvement in the next few quarters."
    • "Win per unit per day on the pure mass in Las Vegas is very challenging. The premium mass, the better customer who comes in for special events, fights, high frequent, out of Southern California, that is getting better."