Las Vegas Sands Shares Jump on Better Than Expected Earnings

Shares of Las Vegas Sands shares were up over 10% in Thursday’s trading session after the company revealed better than expected first quarter financial results.

For the quarter, revenue fell to $1.78 billion, a drop of 51.2%, but still ahead of estimates by $120 million. GAAP net income was nil and still beat estimates by 10 cents a share.

“Despite these circumstances, our balance sheet strength will enable us to emerge from this pandemic with all our promising future growth opportunities fully intact,” said CEO Sheldon Adelson. “We remain extremely optimistic about an eventual recovery of travel and tourism spending across our markets.”

Adelson said on the earnings call, “We don’t know how long this pandemic will last, but we have confidence that travel and tourism spending in each of our markets and around the world will eventually recover. As surely as day follows night, people will travel again, shop again, come together again to enjoy entertainment and social interaction to exchange ideas and to conduct business. Focusing on the support for our team members and communities today will position us to recover more quickly as the impact of the pandemic eventually subsides and it is also the right thing to do.”

“Our optimism about an eventual recovery coupled with our financial strength enables us to continue the execution of our previously announced capital investment programs in both Macao and Singapore. We believe these investments will strengthen our leadership position in each of these markets and will provide a larger platform for future growth, as travel and tourism spending eventually recover. Macao, we are making great progress and our USD2.2 billion capital investment program with The Londoner Macao and The Grand Suites at Four Seasons. In addition to these large projects with which you are already familiar, we are moving full speed ahead with a number of other investments which we think will increase both the objectiveness and the diversification of our integrated results portfolio.”

Several analysts chimed in with bullish remarks on the report including JPMorgan, who issued an Overweight rating and $52 price target.

Analyst Joseph Greff believes that the company could benefit from improving trends in Macau, which was among the first gaming markets to experience a downturn due to COVID-19. He also believes that Las Vegas Sands has an above-average liquidity position compared to its peers and that the stock offers a low entry point for new investors.

Disclaimer: We have no position in Las Vegas Sands Corp. (NYSE: LVS) and have not been compensated for this article.