US Binary Option SitesUK Binary Option Sites

Weak Macao operations keep Las Vegas Sands bearish

Last week, casino operator Las Vegas Sands (NYSE: LVS) reported an increase in fiscal 2017 first-quarter revenues and earnings, compared to the same period of 2016. However, the stock declined as the revenue missed analysts’ estimates. A look at the first-quarter results reveal few other issues faced by the company, as explained below. Thus, we forecast the stock to remain bearish in the short-term.

The Las Vegas-based company reported Q1, FY17 net income of $480 million, or $0.60 per share, on revenues of $3.11 billion. In the first-quarter of 2016, the resort operator posted net income of $320 million, or $0.40 per share, on revenues of $2.72 billion.

In the quarter ended March 2017, Casino revenues increased $322 million y-o-y to $2.404 billion. Similarly, room revenues were $406 million, an increase of $40 million from Q1 2016. During Q1 2017, Food and beverage revenues increased to $213 million, from $188 million in the similar quarter last year.

KTNV Channel 13 Las Vegas

Excluding charges, Q1 2017 adjusted net income was $527 million or $0.66 per share, compared to $375 million or $0.47 per share in Q1 2016. Analysts’ had anticipated earnings of $0.62 per share on revenues of $3.12 billion.

Even though the earnings beat estimates, the Macao operations were not impressive. The Venetian Macao Q1 revenues declined $8 million y-o-y to $741 million. The hotel occupancy rate increased about 9% y-o-y to 86.5%. However, the average daily room rate fell to $209, from $226 last year.

Sands Cotai Central reported Q1 revenues of $467 million, down $63 million from the first-quarter last year. While the occupancy rate increased 2% to 79.4%, the average daily room rate decreased to $155, from $150 a year ago.

Likewise, Parisian Macao and Four Seasons Hotel revenues declined $26 million and $5 million to $318 and $143 million, respectively. Sands Macao revenue was $182 million, up $7 million from last year. However, average room rate fell to $195, from $207 in 2016. Macao is the gaming capital of the world. Thus, lackluster revenues from Macao operations are expected to keep the stock weak in the short-term.

The stock is moving along a declining trend line, as shown in the image below. Additionally, the stock has failed to cross the major resistance at 59. The MACD oscillator has made a bearish crossover below the zero line. Thus, situation favors further decline in the stock price.

Las Vegas Sands Stock Price: May 16th 2017

Las Vegas Sands Stock Price: May 16th 2017

One of the simple methods to trade a downtrend is by investing in a low or below option from a binary broker who offers a weekly expiry contract. To ensure better chances of success, the option should be picked when the stock of Las Vegas trades near $58 in the NYSE.


Related Articles

India’s BoB Suspends Two Senior Executives Over Forex Scam

India’s Prime Minster Narendra Modi and finance minister Arun Jaitley have been targeting corporation and individuals who have stashed black

BIS Warns Central Banks Of Next Global Financial Crisis

The Bank of International Settlements (BIS), which is supposed to be the central bank of all central banks, warned that

UK Pensioners Troubled After FTSE 100 Loses £34 Billion

The FTSE 100 in London declined by over two percent on the 4th of January 2016 due to a China