Las Vegas Sands
recorded a drop in second-quarter earnings as expenses climbed, but the company provided some positive news on its conference call about its properties in Macau.
The casino operator said its adjusted income totaled $81.9 million, or 23 cents a share, compared with an adjusted profit of $121.3 million, or 34 cents a share, a year earlier. The results missed analysts' estimate for an adjusted profit of 25 cents a share, according to Thomson Financial.
Adjusted earnings exclude items like pre-opening expenses, the retirement of debt and development costs. Las Vegas Sands attributed the decline to increases in net interest expenses and depreciation charges.
Net income, which includes all items, plunged to $34.4 million, or 10 cents a share, from $109.3 million, or 31 cents a share, a year earlier.
Net revenue rose 18.6% to $612.9 million, beating the average analyst estimate of $571.6 million.
At the company's Venetian casino in Las Vegas, net revenue rose 14%. At the company's Sands Macau property, revenue jumped 22%.
In Macau, the company's operating profit was essentially flat, largely because of the elevated expenses related to the opening of the massive new Venetian Macau. Las Vegas Sands is set to open the property later in August.
Lately, an aura of confusion has surrounded Macau casino operators since the Chinese government increased visa restrictions for certain mainland residents looking to travel to the island. Investors have worried the rules would slow down the region's growth.
On its earnings call, Las Vegas Sands' management said government officials told the company the visa restrictions are meant to cut down on day-trip visitors. That would help ease crowding and make room for convention visitors and others who will stay on a longer basis.
Overall visitation to Macau is expected to surge in conjunction with the opening of the company's Venetian casino.
Management also disputed a recent press report that said the company was increasing commissions paid to junket operators in order to fill the Venetian property.
"We have a waiting list of junket reps at a reduced commission rate. The rumor we're increasing junket commissions is wrong," management said.