Should You Short Las Vegas Sands Corp. (LVS) Now?

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Las Vegas Sands Corp. (NYSE:LVS) announced fourth quarter results after the bell last Wednesday. The stock, which was at $53.38 at opening trade on Jan. 28, slipped 3.9% to $51.05 at the close of trading the next day. On the day the results were to be released, the stock gained 0.94% and closed at $51.56. However, after the results became public, the after hours quote was $54.25, a gain of 5.22%.

Considering that the company reported an increase of 36% in fourth quarter profit and that the stock rose 15% in January, is LVS a buy at this price or is it a good short? Let us review the results and try to find an answer.

Las Vegas Sands Corp. (NYSE:LVS)Las Vegas Sands: The Company

LVS is a Fortune 500 company and a leading developer of destination properties (integrated resorts). It operates in Macao, Singapore and the US. The integrated resorts developed and operated by the company feature gaming, entertainment and retail, premium accommodations, convention and exhibition facilities. In Macao, the company operates through Sands China Ltd (SCL), 70.3% of which is owned by LVS. SCL operates The Venetian Macao; Four Seasons Macao; Sands Macao, and Other Asia (comprised primarily of its ferry operations and various other operations that are ancillary to its properties in Macao). The Singapore operating segment is comprised of Marina Bay Sands, which features roughly 2,600 rooms and suites along with 160,000 square feet of gaming space housing 2,500 slot machines and 600 gaming tables.

Las Vegas Sands’ US properties include the Venetian Resort Hotel Casino (The Venetian Las Vegas) and the Palazzo Resort Hotel Casino (The Palazzo), Five-Diamond luxury resorts on the Las Vegas Strip, as well as the Sands Expo and Convention Center (the Sands Expo Center) in Las Vegas, Nevada and the Sands Casino Resort Bethlehem (the Sands Bethlehem) in Bethlehem, Pennsylvania.

Earnings

  • Quarterly Results

Quarterly EPS of LVS declined sharply in the second quarter 2012 when it reported EPS of $0.44 as compared to $0.70 in the first quarter. However, in subsequent quarters, it was able to recover part of lost ground and reported EPS of $0.54 in the fourth quarter of 2012.

Net revenue increased by 20.9% and net income attributable to common stock rose by 35.8%, reaching $434.8 million. On Dec. 6 the company paid a special dividend of $2.75 per share in addition to the recurring dividend of $0.25 per share on Dec. 18.

Gaming volumes in Macao reached a record $622.2 million, which resulted in a 43.3% increase in property adjusted EBITDA in Macao.

  • Annual Results for the year ended Dec. 31, 2012

Net revenue for the year showed an increase of 18.3%, up from $9.41 billion to $11.13 billion. The company was able to post a record consolidated EBITDA of $3.79 billion, and net income attributable to common stock rose 20.1% to reach $1.52 billion or $1.85 per share. During the year, the company distributed $3.75 per share to shareholders by way of quarterly and special dividends.

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