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What's in Store for Las Vegas Sands (LVS) in Q2 Earnings?
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Las Vegas Sands Corp. (LVS - Free Report) is scheduled to report second-quarter 2016 numbers on Jul 25, after market close.
Last quarter, Las Vegas Sands posted a 26.23% negative earnings surprise. In fact, the company’s earnings lagged the Zacks Consensus Estimate in three of the last four quarters, with an average miss of 6.56%.
Let’s see how things are shaping up for this announcement.
Las Vegas Sands has been reporting lower-than-expected revenues over the past seven quarters due to a sluggish performance in Macau, its key operating region. In fact, revenues in Macau have declined in all of the three months of this quarter due to the anti-graft corruption drive undertaken by the Chinese government, which significantly affected VIP business in the region. We do not expect any significant improvement in Macau region in the to-be-reported quarter.
Nevertheless, comparatively better performance at the non-gaming segments and growth in the mass markets are expected to boost margins in the to-be-reported quarter. Also, the company’s focus on renovation and promotion of its Las Vegas properties should lead to high occupancy rates and drive segmental performance, thereby somewhat offsetting the weak sales in Macau.
Earnings Whispers
Our proven model does not conclusively show that Las Vegas Sands is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: Las Vegas Sands has an earnings ESP of -3.57%. This is because the Most Accurate estimate stands at 54 cents per share while the Zacks Consensus Estimate is pegged higher at 56 cents.
Zacks Rank: Las Vegas Sands has a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s negative ESP makes surprise prediction difficult.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Vail Resorts Inc. (MTN - Free Report) has an earnings ESP of +1.21% and a Zacks Rank #2.
Penn National Gaming Inc. (PENN - Free Report) has an earnings ESP of +24.14% and a Zacks Rank #3.
Wynn Resorts Ltd. (WYNN - Free Report) has an earnings ESP of +1.03% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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What's in Store for Las Vegas Sands (LVS) in Q2 Earnings?
Las Vegas Sands Corp. (LVS - Free Report) is scheduled to report second-quarter 2016 numbers on Jul 25, after market close.
Last quarter, Las Vegas Sands posted a 26.23% negative earnings surprise. In fact, the company’s earnings lagged the Zacks Consensus Estimate in three of the last four quarters, with an average miss of 6.56%.
Let’s see how things are shaping up for this announcement.
LAS VEGAS SANDS Price and EPS Surprise
LAS VEGAS SANDS Price and EPS Surprise | LAS VEGAS SANDS Quote
Factors Likely to Influence this Quarter
Las Vegas Sands has been reporting lower-than-expected revenues over the past seven quarters due to a sluggish performance in Macau, its key operating region. In fact, revenues in Macau have declined in all of the three months of this quarter due to the anti-graft corruption drive undertaken by the Chinese government, which significantly affected VIP business in the region. We do not expect any significant improvement in Macau region in the to-be-reported quarter.
Nevertheless, comparatively better performance at the non-gaming segments and growth in the mass markets are expected to boost margins in the to-be-reported quarter. Also, the company’s focus on renovation and promotion of its Las Vegas properties should lead to high occupancy rates and drive segmental performance, thereby somewhat offsetting the weak sales in Macau.
Earnings Whispers
Our proven model does not conclusively show that Las Vegas Sands is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: Las Vegas Sands has an earnings ESP of -3.57%. This is because the Most Accurate estimate stands at 54 cents per share while the Zacks Consensus Estimate is pegged higher at 56 cents.
Zacks Rank: Las Vegas Sands has a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s negative ESP makes surprise prediction difficult.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Vail Resorts Inc. (MTN - Free Report) has an earnings ESP of +1.21% and a Zacks Rank #2.
Penn National Gaming Inc. (PENN - Free Report) has an earnings ESP of +24.14% and a Zacks Rank #3.
Wynn Resorts Ltd. (WYNN - Free Report) has an earnings ESP of +1.03% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>