Will Las Vegas Sands Earnings Beat Wynn Resorts and Melco Crown?

Las Vegas Sands (LVS -1.40%) will release its quarterly report on Thursday, and investors are pleased that the stock has hit levels not seen since before the financial crisis. Substantial gains in Las Vegas Sands earnings could help push the stock even higher, especially if those results prove the company's competitive advantage over global rival Wynn Resorts (WYNN -0.82%) and the Macau-centered Melco Crown (MLCO -2.12%).

Las Vegas Sands confuses many investors with its name, inferring that Las Vegas is the core of the company's wealth. Yet the center of the gaming world has shifted to the Far East, with the former Portuguese colony of Macau becoming the magnet for gamers across Asia. As a result, Sands, Wynn, and Melco Crown all gather huge profits from their Macau operations, making Las Vegas almost an afterthought for Sands and Wynn. Let's take an early look at what's been happening with Las Vegas Sands over the past quarter and what we're likely to see in its report.

Stats on Las Vegas Sands

Source: Yahoo! Finance.

Will Las Vegas Sands earnings give investors a big win?
In recent months, analysts have gotten more positive about Las Vegas Sands earnings, raising their third-quarter estimates by $0.03 per share and their full-year 2014 projections by about 4%. The stock has responded well, climbing 27% since mid-July.

Las Vegas Sands came into the quarter with huge momentum, posting sales gains of almost 26% in its second quarter. Net income rose 42%, with a 73% jump in non-rolling chip volume showing that ordinary patrons have become more interested in Macau. Nevertheless, wealthy high-stakes gamers remain critically important, bringing in 11 times the revenue of mass-market table games.

Lately, though, Las Vegas Sands hasn't been maximizing its Macau-based revenue. As the Fool's gaming expert Travis Hoium recently observed, Sands trails Wynn Resorts and Melco Crown in daily table-game wins per unit, and most of its slot-machine figures are also below those of its competitors. The bright spot for Las Vegas Sands is its Cotai Strip presence, which has higher growth potential than the older Macau Peninsula area. Sands hopes to finish its Parisian resort in 2015, but weak table-game results could end up producing a third less revenue than the planned Wynn Cotai and Melco Studio City projects -- if they all get the table awards they're seeking.

The big question for Las Vegas Sands is whether it can break new ground in other areas outside Macau. Its Singapore-based Marina Bay Sands hasn't produced the revenue and earnings growth that the company expected to see. Plans to build a new gaming center in Madrid are somewhat uncertain, although improving economic conditions in Spain and across Europe paint a brighter picture for the planned project than in the recent past.

In the Las Vegas Sands earnings report, watch closely to see whether the sluggish Chinese economy has affected its Macau results. Any slowdown in Macau could be disastrous for the stock, but at least in the past, the gaming economy has proven quite resilient. That fact, along with the value of Cotai, could help Las Vegas Sands keep Melco Crown and Wynn Resorts down at least for the near future.

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