CONTENT:
Las Vegas Sands Corp.'s (LVS) Macau operations took a hit in the financial markets after the local unit, Sands China Ltd., reported weaker-than-expected profits for the quarter ending in September. This news sent the shares of the parent company plummeting by 10% in extended trading on Thursday. Sands China's stock experienced its biggest decline since last April, dropping as much as 9.8% in Hong Kong.
The Macau gaming market, a significant contributor to LVS's revenue, has been grappling with a slowdown in growth. The Chinese government's strict anti-corruption campaign has led to decreased spending by Chinese high rollers in the region's casinos. Moreover, the ongoing trade tensions between China and the United States have added to the uncertainty, further dampening demand.
According to a report by Reuters, Sands China's revenue for the third quarter fell by 14.7% year-on-year to HK$10.7 billion ($1.37 billion). The company attributed the decline to decreased VIP revenue and lower mass market business.
The weaker-than-expected results from Macau caused investors to reassess their expectations for LVS's earnings. In a research note, JPMorgan analyst DS Kim stated, "We believe the disappointing Macau results will lead to lower full-year EBITDA estimates from the Street."
The decline in LVS's shares comes after a strong performance earlier in the year. In the second quarter, the company reported a 22% increase in profit, driven by robust demand in Macau. However, the macroeconomic conditions have since changed, leading to the recent decline in shares.
Despite the challenges in Macau, LVS remains optimistic about the long-term prospects for the region. In a statement, the company's chairman and CEO, Sheldon Adelson, said, "Macau remains a key market for our company, and we continue to believe in its long-term growth potential."
The company is planning several developments in Macau, including the expansion of its Marina Bay Sands property and the construction of a new resort on the Cotai Strip. These projects are expected to contribute to the company's growth in the region in the coming years.
In conclusion, the weaker-than-expected profits reported by Sands China Ltd. in Macau caused a significant decline in the shares of Las Vegas Sands Corp. The slowdown in growth in the Macau gaming market, coupled with the ongoing trade tensions and Chinese government's anti-corruption campaign, have added to the uncertainty surrounding the industry. However, LVS remains optimistic about the long-term prospects for Macau and is planning several developments to drive growth in the region.
Sources:
Reuters: Sands China Q3 revenue falls 14.7%, shares plunge most since April
CNBC: Las Vegas Sands shares tumble after Macau revenue miss
Bloomberg: Las Vegas Sands Falls Most Since April After Missing Macau Estimate
MarketWatch: Las Vegas Sands shares plunge after Macau profit misses estimate
JPMorgan Research: Las Vegas Sands 3Q20 Earnings Recap
CONTENT:
Las Vegas Sands Corp.'s (LVS) Macau operations took a hit in the financial markets after the local unit, Sands China Ltd., reported weaker-than-expected profits for the quarter ending in September. This news sent the shares of the parent company plummeting by 10% in extended trading on Thursday. Sands China's stock experienced its biggest decline since last April, dropping as much as 9.8% in Hong Kong.
The Macau gaming market, a significant contributor to LVS's revenue, has been grappling with a slowdown in growth. The Chinese government's strict anti-corruption campaign has led to decreased spending by Chinese high rollers in the region's casinos. Moreover, the ongoing trade tensions between China and the United States have added to the uncertainty, further dampening demand.
According to a report by Reuters, Sands China's revenue for the third quarter fell by 14.7% year-on-year to HK$10.7 billion ($1.37 billion). The company attributed the decline to decreased VIP revenue and lower mass market business.
The weaker-than-expected results from Macau caused investors to reassess their expectations for LVS's earnings. In a research note, JPMorgan analyst DS Kim stated, "We believe the disappointing Macau results will lead to lower full-year EBITDA estimates from the Street."
The decline in LVS's shares comes after a strong performance earlier in the year. In the second quarter, the company reported a 22% increase in profit, driven by robust demand in Macau. However, the macroeconomic conditions have since changed, leading to the recent decline in shares.
Despite the challenges in Macau, LVS remains optimistic about the long-term prospects for the region. In a statement, the company's chairman and CEO, Sheldon Adelson, said, "Macau remains a key market for our company, and we continue to believe in its long-term growth potential."
The company is planning several developments in Macau, including the expansion of its Marina Bay Sands property and the construction of a new resort on the Cotai Strip. These projects are expected to contribute to the company's growth in the region in the coming years.
In conclusion, the weaker-than-expected profits reported by Sands China Ltd. in Macau caused a significant decline in the shares of Las Vegas Sands Corp. The slowdown in growth in the Macau gaming market, coupled with the ongoing trade tensions and Chinese government's anti-corruption campaign, have added to the uncertainty surrounding the industry. However, LVS remains optimistic about the long-term prospects for Macau and is planning several developments to drive growth in the region.
Sources:
Reuters: Sands China Q3 revenue falls 14.7%, shares plunge most since April
CNBC: Las Vegas Sands shares tumble after Macau revenue miss
Bloomberg: Las Vegas Sands Falls Most Since April After Missing Macau Estimate
MarketWatch: Las Vegas Sands shares plunge after Macau profit misses estimate
JPMorgan Research: Las Vegas Sands 3Q20 Earnings Recap
