Sands sees boost from Parisian as Wynn disappoints

Las Vegas Sands Corp., the world’s largest casino owner, reported a jump in profit after opening its newest resort in Macau, a sharp contrast to rival Wynn Resorts Ltd., which said its newest Chinese property was off to a slow start.
Sands’ profit rose to 72 cents a share, excluding some items, the Las Vegas-based company said last week in a statement. Analysts were predicting 60 cents, the average of estimates compiled by Bloomberg.
Sands, founded by billionaire Sheldon Adelson, opened the USD2.9 billion Parisian resort in Macau in September. The property features a half-sized replica of the Eiffel Tower, as well as a water park for kids and a shopping mall with street performers. It made its debut amid signs of a recovery in gambling in Macau, the only place in China where casinos are legal.
Sands shares rose as much as 5.6 percent to $59.94 in New York trading Friday. Wynn, which had dropped 9.3 percent on Thursday after its earnings report, recovered some ground Friday, climbed 1.2 percent to $88.55.
The company saw a 19 percent increase in visitors to its Macau properties in September, compared to the same month last year, executives said on a call with investors. Sands’ neighboring Four Seasons resort posted a 7 percent increase in retail sales, which Adelson attributed to the Parisian opening. Gambling volume rose and restaurants are full.
“People want to see that Parisian theme approach,” Sands President Rob Goldstein said on a conference call after the results were announced. “The Eiffel Tower, that facade has great curb appeal.”
Total revenue at Sands grew 2.6 percent to $2.97 billion, ahead of projections of $2.82 billion. The company and other Macau operators built their newest properties during a two-year slump in the market, prompted by a Chinese government crackdown on corruption on the mainland. The region experienced its third straight month of gambling growth in October. Reports of higher visitation early in October also suggest the market is rebounding.
Sands’ strong quarter outshone that of Wynn Resorts, which posted quarterly sales that missed analysts’ estimates as its new $4.4 billion project in Macau failed to lift betting revenue.
One of the reasons may be nearby construction, which impeded access to the property. Wynn has been working with the Macau government to make improvements, such as crosswalks, to make it easier to get to. Wynn also said it underestimated demand for casual dining options at the new property and is expanding those.
Sands’ new Parisian Macao contributed $19.2 million of adjusted property earnings before interest, taxes, depreciation and amortization during its first 18 days of operation, the company said. Adjusted property earnings at the Sands’ biggest property, Venetian Macao, surged 23 percent to $314.8 million. The tally at the Sands Cotai rose 3.6 percent to $176.6 million. Net sales at the Venetian Macau increased to $772.5 million, compared with $699.6 million a year earlier.
In Sands’ home market of Las Vegas, property earnings increased 6.9 percent to $85.3 million. Earnings at the Singapore’s Marina Bay Sands edged up slightly to $390.7 million, up slightly from a year earlier. Christopher Palmeri, Bloomberg