Will Las Vegas Sands Surprise Again in 3Q15?



Las Vegas Sands to report 3Q15 earnings on October 21

Las Vegas Sands (LVS) is expected to report its 3Q15 earnings on October 21, 2015. The casino major has seen its gaming and room revenues decline and its dividend yields grow. It’s been using debt extensively.

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Analyst expectations

Las Vegas Sands is expected to continue reporting grim earnings in 3Q15.

  • Analysts are expecting Las Vegas Sands to post a year-over-year decline in both earnings per share and revenue, driven by weakness in business.
  • Revenue has been downgraded to $2,996 million for the quarter ended September 2015.
  • EBITDA (earnings before interest, taxes, depreciation, and amortization) has been downgraded to $997.0 million, which would result in an EBITDA margin of 33%.
  • Analysts are also expecting net income of $508.5 million. Last quarter, LVS surprised Wall Street by posting higher-than-expected profits due to higher market share in the mass market, which helped offset the decline in VIP gaming.
  • The consensus estimates of analysts covering Las Vegas Sands stock has been reduced to $0.63 per share.

Can we remain optimistic?

Like the other resort and casino companies, Las Vegas Sands is also suffering from revenue losses. But at the same time, the company has made efforts to keep expenses down through various cost-cutting efforts. The company is adapting to the changing mix of business, which is now shifting in favor of mass-market tourists. This should help LVS recover its losses sooner when the gaming market in Macao recovers.

Investors who want to avoid the risk of investing in a single casino company such as Las Vegas Sands (LVS), Melco Crown Entertainment (MPEL), MGM Resorts (MGM), and Wynn Resorts (WYNN), which have been hit by the corruption crackdown by the Chinese government, may invest in ETFs that invest in casino stocks. One of these ETFs is the VanEck Vectors Gaming ETF (BJK). For a broader exposure, you can invest in the iShares US Consumer Services ETF (IYC).


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