UPDATE 2-Las Vegas Sands posts second-quarter net loss
(Adds company comment, byline, updates stock price)
By Deena Beasley
LOS ANGELES, July 30 (Reuters) - Casino operator Las Vegas Sands Corp (LVS.N) on Wednesday posted a net loss in the second quarter due to costs related to opening casinos in the United States and Macau, and said the weak U.S. economy was hurting business in Vegas.
Sands shares fell nearly 4 percent in after-hours trade. The stock has lost around 70 percent of its value since October, as investors began to question growth assumptions for China's gambling enclave of Macau.
Sands, whose chief executive officer is billionaire Sheldon Adelson, posted a net loss for the quarter of $8.8 million, or 2 cents per share, compared with net income of $34.4 million, or 10 cents a share, a year earlier.
Excluding a loss on disposal of assets, development expense and other items, the Las Vegas-based company said it earned 9 cents a share in the quarter, which fell short of the average analyst estimate of 11 cents a share, as compiled by Reuters Estimates.
Net revenue rose 81.4 percent to $1.11 billion, matching the average analyst estimate.
Sands opened in January its 3,000-room Palazzo resort in Las Vegas, adjacent to its Venetian hotel-casino and the Sands Expo and Convention Center, but the property's ramp-up has been slower than expected and ongoing economic weakness has taken a toll on all Las Vegas Strip resorts.
Sands said Las Vegas operating income fell 26.2 percent to $42.1 million due to costs related to opening the Palazzo. Excluding those costs income rose 28.1 percent to $106.6 million.
Chief Operating Officer William Weidner, speaking on a conference call with analysts and investors, said Vegas "may remain challenging for an extended period," and the company plans to cut annual costs at the two properties by $70 million to $90 million -- up from a previous target of $40 million to $60 million.
In Macau, the only part of China where gambling is legal, the company has operated a casino since 2004, and last August opened a second property, the Venetian Macao -- the world's biggest casino.
Competitors Wynn Resorts Ltd (WYNN.O) and MGM Mirage (MGM.N) also opened casinos in the Chinese gambling haven last year.
Sands said casino revenue at the Venetian Macao totaled $415.6 million in its third full quarter of operations, while operating income was $83.6 million.
Second-quarter casino revenue at the older resort, Sands Macao, fell 29.8 percent to $262.2 million, while operating income slid to $40.2 million from $104.7 million.
Weidner said Sands has begun to implement a plan that will trim between $60 million and $70 million of annual operating expense from its Macau properties.
Sands is developing a string of resorts in a part of Macau dubbed the Cotai Strip, including a Four Seasons hotel slated to open next month.
Elsewhere, the company is building a casino project in Singapore slated to open next December and a 126-acre casino resort development on the site of the former Bethlehem Steel plant in Bethlehem, Pennsylvania, which is expected to open next July.
Shares of Sands, which rose 8.6 percent to close at $47.82 on the New York Stock Exchange, were down nearly 4 percent at $46 after hours.
