It's another record quarter for Las Vegas Sands (NYSE: LVS). Revenue reached a new high of $2.54 billion in the fourth quarter, and earnings per share increased 35.7% to $0.57 per share. To top it off, the company announced a new $1-per-share annual dividend. The company's solid performance continues.
Looking at the operating trends, there appears to be a big change going on in Las Vegas Sands. The company is transitioning from a growth machine to a steady operator with more stable, and less spectacular, results. The days of the eye-popping numbers are over, which may not be a bad thing.
Reading between the lines
The headline-worthy numbers of 26.3% revenue growth and adjusted property EBITDA growth of 30% look impressive, but when compared to third-quarter results they don't pop quite as much as we might expect from Las Vegas Sands.
Results have leveled off at Sands Macau, bouncing around in the same range for the last seven quarters. Four Seasons Macau grew EBITDA by just $3.3 million, shaking a string of strong sequential growth. And Marina Bay Sands grew EBITDA just 3.1% sequentially. Are we already seeing results plateau in Singapore?
This isn't to say that Las Vegas Sands is struggling; in fact, it is quite healthy. It is to say that growth appears to be slowing considerably and may settle in at the low double-digits. What I'll keep an eye open for over the next few weeks is whether the results are similar for competitors in Macau. Melco Crown (Nasdaq: MPEL) neighbors The Venetian Macau and is apparently losing market share there. Wynn Resorts (Nasdaq: WYNN) and MGM Resorts (NYSE: MGM) are neighbors to Sands Macau on the Macau Peninsula, so we may see growth slow there if Sands Macau's levels are any indication.
Too early for a Las Vegas recovery
Everyone is waiting for a Las Vegas recovery. Slowly, it's happening, with 9.3% revenue growth for the year, but flat property EBITDA of $80.9 million isn't the kind of profitable growth for which some were hoping. Most of the growth was from much stronger convention business. What is of concern is that gambling was down 2.9% from last year.
How this affects game-makers like International Game Technology (NYSE: IGT) will be interesting to watch. A refresh of games may pique interest, but if gaming revenue continues to flounder, then I have to question if casinos will be itching to replace equipment when the growth is in other areas.
Foolish bottom line
Results may have been unspectacular for Las Vegas Sands, but they were solid, something investors will have to get used to. The boom days of gaming's growth are coming to an end, and now it's time to focus on things like paying back shareholders and improving existing resorts.
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