After a long time of slow business, Las Vegas’ leisure demand has started to improve along with a gradual recovery of the US economy. The companies that were able to withstand the bad times will be the ones in condition to profit the most. However, fierce competition and a variety of options are always a threat to increasing earnings.
Let’s take a look at three players in the gaming industry.
International Game Technolog
International Game Technology (NYSE:IGT) is a global gaming company specializing in the design, development, manufacture, and marketing of electronic gaming equipment and systems products, including online and mobile solutions.
The company’s EPS of $0.28 was better than expected, despite an operating margin contraction. International Game Technology (NYSE:IGT) has a dominant position in the industry, defended by innovative and technologically advanced products. However, the company is expected to experience increasing operating costs derived from management’s plans to increase investments in product development. This will affect the company’s profitability going forward.
As a supplier, International Game Technology (NYSE:IGT) requires a healthy economy that can ensure equipment renewals from its clients. As the economy improves rising demand for advanced slot machines and clients willingness to develop new games gives the company growth perspectives. Thumbs up for International Game Technology (NYSE:IGT)’s future.
Wynn Resorts: Recovering along with the industry
Wynn Resorts, Limited (NASDAQ:WYNN), the leading developer, owner and operator of casino resorts in Las Vegas and in Macau (China).
The company’s first-quarter EPS reached $2.03, 52.6% higher than the prior year’s. Wynn Resorts, Limited (NASDAQ:WYNN) is profiting from solid business in Las Vegas and a recovery in Macau’s mass market category. Management’s policy of not using credit as a marketing tool allows Wynn Resorts, Limited (NASDAQ:WYNN) to maintain highly successful credit standards. I believe this policy is correct and in line with the strategy towards premium rate gaming relative to overall gaming.
The company has been able to survive the downturn in the business and can profit from a stronger revival in the US economy. In addition, Wynn Resorts, Limited (NASDAQ:WYNN) has approvals to build its Cotai project and expects to finish it before Chinese New Year 2016, which should boost its top line.
Las Vegas Sands: Top-line growth and ambitious plans
Las Vegas Sands Corp. (NYSE:LVS) is a hotel, gaming, and retail mall operator that owns The Venetian Resort Hotel Casino, the Sands Expo and Convention Center, Venetian Interactive (an internet-based venture) and the Venetian Macao (in Macao, clearly).
The company’s first-quarter 2013 resulted in EPS of $0.71, beating the year-ago quarter’s earnings by 1.4%. The main drivers of this increase are strong top-line growth and operational efficiency. Net revenue of $3.3 billion is up 19.5% year over year, proving the company’s position in the market and its international presence.
Las Vegas Sands Corp. (NYSE:LVS)’ strong brand recognition and attractive property locations, plus the development of Sands Cotai Central resort project, will ensure future growth.
Finally, management plans to strengthen the international presence of Las Vegas Sands Corp. (NYSE:LVS). This includes pipeline projects in Korea, Japan, Vietnam and Taiwan, plus the exploration of opportunities in South America and Europe.
Conclusion
Being the only Chinese city where gambling is legal, Macao has become a destination for investments. That said, Vegas will be back and remain the worldwide gambling destination. Overall these results speak for themselves: gaming is coming back.
The article Gaming’s Come Back originally appeared on Fool.com.
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