Las Vegas Sands' Earnings Take a Hit

The expectation was that building a casino in Macau, the closest island to mainland China that allows gambling, would be a financial slam dunk. But the Las Vegas Sands Corp., which owns the Sands Macao, learned firsthand that there's no such thing as a sure bet.

When the dust from the third quarter settled, the Sands posted a 37-percent drop in net income, $48.5 million, compared with $76.8 million in the same period last year. The company attributed the loss to lower than expected income at the Sands Macao because of stiffer than expected competition from other casinos in Macau. Table gaming at The Venetian in Las Vegas also posted negative results.

Not all the news for the company was bad – revenue for the third quarter increased 19.5 percent to $661 million, compared with $553 million in the same period last year. And, even with the competition in Macau, the Sands upped its ante in the region with the opening of another property, The Venetian Macao, in August.

Two other casino giants, MGM Mirage and Boyd Gaming, fared better in the third quarter.

MGM scored earnings of $183.9 million, compared with $156.3 million in the same period last year. The company attributed the gains to the re-opening of the Hurricane Katrina-damaged Beau Rivage Resort & Casino in Mississippi and related insurance recoveries.

Boyd also had a mostly positive third quarter with net income of $31.8 million, compared with $12.9 million in the same period last year. Revenue dropped 8 percent to $490.1 million, with one reason cited by the company as competition from other casino properties in the Gulf Coast region that have also recovered.