Las Vegas Sands to Unveil Q3 Earnings

Las Vegas sands are preparing to announce their financial performance figures for Q320. The international casino conglomerate with business interests in Asia, North America, and Europe will be the first company of its size in the industry to do so. The revelations will serve as an excellent cross-comparison tool for judging the recovery performance of the casino industry across the three major gambling markets.

Singapore bay at Night.

The Singapore gambling sector has been severely damaged by COVID-19 shutdowns, and on the eve of third quarter earnings investors around the world are looking for a glimmer of hope that normality will soon return.

The company is an interesting case study for anybody with a stake in the gambling industry’s recovery. As has been well documented, the US gaming losses have only been slightly eclipsed by the similar devastation witnessed across the Asian and Australian gambling industries. The total lasting impact has not yet been fully realized, but if 2Q20 financial results are anything to go by then the recovery could be long and arduous.

The Las Vegas Sands company is an amalgamation of assets from some of the world’s most prominent gambling cities, including Singapore, Macau, and of course, Las Vegas. The company is expected to make a net loss of $0.44 on each share, a staggering turnaround considering the prior year quester earnings per share was a net profit of $0.75. However, compared to the previous quarter in 2020 were $1.07 was lost on each share, this is indicative of a strong turnaround.

Many surveys and analyses have been conducted on the financial health of the industry. One of the most significant came from the Zacks Consensus Estimate, who have indicated that revenues are expected to have declined by over 73.3 percent, coming in at $867.4 million. There are also those that accuse this estimate of being far too optimistic, citing real-liquidity issues and long-term uncertainty as major factors. Other market watchdogs such as WSJ Markets peg the losses per share at $0.73, citing a general worsening of the sentiment towards the casino

Major Shortage of Good News

Whilst these results will be seen as extremely disappointing for the casino giant, it can hardly be said that any casino in the industry has enjoyed much success this year. Despite properties in all its major markets being open for a long time, the dismal financial performance puts doubt over the effectiveness of the recovery plans. The realistic recovery roadmap is continuously being pushed further and further into the future.

The business model of Las Vegas Sands has always been primarily underpinned by its endless supply of luxury hotel rooms. This setup was always going to leave the firm particularly stuck when it came to launching a recovery. What it needs is customers coming through the doors and spending cash, and that has not happened so far, despite borders with China reopening. Tighter border restrictions, which include a more stringent approach to visa approval and the requirement of a negative Covid-19 test are the new basis for entry.

Melco Resorts & Entertainment Coming Back Strong

Analysts have been looking for a horse to back in the recovery race since lockdown measures were announced in March. It would seem that Melco is one of the best of the bunch in this regard, performing very well across its main verticals since reopening for business again in June. Along with Galaxy Entertainment, both of the casinos have been expanding their main business operations of offering luxury gaming services to the masses. Thus, Melco and Galaxy are able to hit the perfect sweet spot. Delivering a high volume of gambling services to the highest paying customers coming to the market.

Singapore & Las Vegas Also Expected to Report Disappointing Performance

The Singapore gaming sector has been a disappointing proposition throughout the pandemic. One of the main determinants of this poor performance is due to the island nation failing to open its doors to international travel, despite making an agreement with Hong Kong. According to the industry analyst agencies, the Singapore gambling market is expected to drop by at least 72 percent compared with a similar time period last year.

As for Las Vegas, the current consensus is that the industry will report a slump in earnings of up to 66 percent lower than the same period last year’s figure. This follows a reduction in the number of financial analysts holding a buy rating on the stock. Executives across the Las Vegas casino industry will be seeking their silver lining – and some signs of a significant boost in prosperity in the weeks following the close of the third quarter.

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