LAS VEGAS: Las Vegas Sands, the casino company run by the billionaire investor Sheldon Adelson, said its net profit for the first quarter fell 25 percent from a year ago, citing higher expenses linked to planned casino openings in Macao, Singapore and the United States.
Net income dropped to $90.9 million, or 26 cents per share, compared with $121.8 million, or 34 cents a share, a year ago, it said Wednesday. Revenue grew 18.5 percent to $628.2 million.
After excluding one-time items, adjusted net income for the quarter ended March 31 was 32 cents per share, down from 38 cents a share a year earlier.
The results met expectations. Analysts polled by Thomson Financial had projected a first-quarter adjusted net income of 32 cents per share on revenue of $617.1 million.
The earnings announcement came after the U.S. markets closed. Las Vegas Sands shares fell $3.19, or 3.6 percent, in extended trading after closing up $2.92, or 3.4 percent, to $88.54 on the New York Stock Exchange.
The company said its profit was hurt by a 61 percent increase in interest expenses to $34.6 million because of borrowing under a $2.5 billion credit facility for the developments in Macao and a $1.4 billion credit facility for developing a resort in Singapore.
It also incurred $12 million in higher expenses at the Sands Macao for speeding up the promotion of supervisors and increasing commissions for VIP junket operators to prepare for the opening of its $2.4 billion anchor resort on the Macao Cotai Strip, The Venetian Macao, scheduled for August.
The Sands chief operating officer, William Weidner, said some promotions were made to keep staff from migrating to the competition.
"We, in essence, advance-promoted and advance-paid many of the hundreds of people that we needed to be the supervisory people when we open up The Venetian," he said.
Robert LaFleur, an analyst at Susquehanna Financial Group, said the market was unnerved by the unexpectedly higher expenses in Macao.
"The market is very jittery on Macao in general in advance of The Venetian opening," he said.
Concerns remained about whether the Las Vegas model of high-end restaurants and hotels will work in Macao, which had been dominated by hard-core gamblers who came for a single purpose and left the same day, he said.
"The theory behind the Cotai Strip and The Venetian Macao is to create a kind of new market for conventiongoers, vacationers, tourists to come to Macao as a destination resort, not just as a quick-fix gambling day-trip," LaFleur said. "People are waiting to see how it actually works when the doors fly open."
Net revenue at The Venetian in Las Vegas rose 11.7 percent from a year ago to $277.8 million. Net revenue at The Sands Macao rose 24.4 percent to $350.4 million.
The company broke ground in February on the $3.6 billion Marina Bay Sands in Singapore, which it said remained on track to open in 2009 |
