Friday, August 04, 2006

Results at The Venetian hit a road bump during the spring, but Las Vegas
Sands Corp. had China to fall back on. Booming revenue at the company's
casino in Macau helped rescue the second-quarter earnings for Las Vegas
Sands Corp. "One quarter or one month does not concern us," Las Vegas Sands
Chairman Sheldon Adelson said during a conference call Wednesday afternoon
with analysts and investors announcing the company's results for the quarter
that ended June 30. "Las Vegas has been here for decades and will be here
for decades more," Adelson said. "There are always going to be peaks and
valleys." Company revenue in the three-month period was $517 million, a 29.6
percent increase from $398.8 million in the second quarter last year. Las
Vegas Sands earned 31 cents a share, compared with 24 cents a share a year
ago. Analysts polled by Thomson First Call estimated the company would earn
34 cents a share in the quarter. The company's net income for the quarter
was $109.3 million, an increase of 26.5 percent from $86.4 million a year
ago.
The Venetian's casino revenue was affected by lower win percentages. Despite
increases in the money gambled by customers on slot machines and table
games, revenue fell 3 percent in the quarter to $71.3 million compared with
$73.7 million a year ago.

The Venetian reported operating income of $42.8 million, a decrease of 17
percent compared with $51.6 million in the second quarter of 2005. Adjusted
property cash flow was $63.2 million, a decrease of 10.3 percent compared
with $70.4 million for the same period a year ago.

Las Vegas Sands executives blamed the decreases on the negative effect of
lower win percentages coupled with higher payroll and related benefit costs.
The Venetian hired more employees during the quarter to staff three areas --
a new poker room, 450,000 square feet of convention space and two new
showrooms.

"We will now focus on fine-tuning our efforts to enhance the profitability
of these business activities as well as look for opportunities for near-term
operational efficiencies," Las Vegas Sands President Bill Weidner said.

Meanwhile, Las Vegas Sands said construction continued on the $1.8 billion
Palazzo next to The Venetian, scheduled to open next year. Much of the
enhancements at The Venetian, such as the added meeting space, will be
integrated into the Palazzo.

The Sands Macau, however, pulled the company through.

Second-quarter casino revenue in Macau was $307.1 million, a 52.7 increase
from $201.1 million in the second quarter last year.

Cash flow at the Sands Macau was $116.9 million, a 44.3 percent increase
compared with $81 million a year ago. The casino's operating income in Macau
was $101.6 million, an increase of 35.9 percent compared to $74.8 million
last year.

"Despite significant increases in Macau mass market capacity overall, as
well as increases in mass market table capacity at the Sands Macau itself,
our mass table drop per unit, per day, has remained steady, and our win per
unit, per day has increased," Weidner said.

He added that money wagered on slot machines in Macau grew while the
casino's high-end business doubled.

Gaming analyst Matthew Jacob of Majestic Research said a weakening market in
Las Vegas during the quarter affected the company's earnings. But the Sands
Macau and its growing dominance in the Asian market will continue to carry
the company.

"Macau was helped by being lucky at the tables; in Las Vegas, Sands was
unlucky at the tables," Jacob said. "We'll have to see how business rebounds
over the next few quarters."

The company announced earnings after the close of trading on the New York
Stock Exchange. Shares of Las Vegas Sands traded up Wednesday, finishing at
$65.28, a jump of $3.86 or 6.28 percent.

But in after-hours trading, shares in Las Vegas Sands dropped almost 4
percent.

Company executives spent much of the conference call touting the growing
presence in Asia.

Weidner said the $2.4 billion Venetian Macau on the Cotai Strip was topped
off. He said six other sites in the area that will include brand-name hotels
and casinos operated by Las Vegas Sands are under construction or the land
is being prepared for development. The Venetian Macau is expected to open
next summer.

Las Vegas Sands spent about $2.3 million in development expenses for its
project in Singapore, which was awarded in April. The company plans to build
the $3.6 billion Marina Bay Sands with an opening planned for 2009. Overall,
Las Vegas Sands spent $7.9 million in development expenses during the
quarter.