Las Vegas Sands Corp. (LVS - Analyst Report) posted mixed fourth quarter and full year 2014 results wherein earnings beat the Zacks Consensus Estimate while revenues missed the same. The company increased its quarterly dividend by 30%. The impressive earnings and dividend increase caught investors’ attention and share price of this leading casino operator was up approximately 3.2% during aftermarket trading.

Las Vegas Sands’ fourth quarter earnings of 92 cents beat the Zacks Consensus Estimate of 81 cents by 13.5%. Also, it surged 27.8% year over year. The upside in earnings reflects a decline in operating expenses and improved margins. However, the positives were partially offset by weakness in VIP gambling.

Quarterly net revenue of $3.42 billion missed the Zacks Consensus Estimate of $3.55 billion by 3.8% and declined 6% year over year due to weak performance in Macau. Gross gaming revenues in Macau declined in double digits in all three months of the quarter. The downside is the result of a nationwide crackdown on corruption in China that compelled Macau officials to impose restrictions on VIP gamblers in order to stop billions of dollars from being siphoned off illegally from mainland China to Macau.

On a consolidated basis, adjusted property EBITDA increased 10.9% to $1.35 billion during the quarter. Operating expenses declined 13.5% year over year due to a 4% decline in resort operation expenses.

Property Details: Macau Operations

The company's Macau business includes the following resorts:

Marina Bay Sands, Singapore

Revenues at Marina Bay Sands surged 27.1% year over year to $838.6 million owing to a 33.7% increase in casino revenues. Adjusted property EBITDA was $518.5 million, up 100.3% year over year.

However, Rolling Chip volume fell 26.8% while Non-Rolling Chip drop fell 3.3%.

Four Seasons Hotel Macau

Revenues at the Four Seasons Hotel Macau and Plaza Casino were up 2.4% to $243.8 million mainly due to an increase in casino and mall revenues. However, the increase was partially offset by a decline in rooms, food and beverage and convention, retail and other revenues.

Non-Rolling Chip drop decreased 10.2% while Rolling Chip volume decreased 36.3% year over year. Adjusted property EBITDA also went up 20.7% year over year to $92.7 million.

Sands Macau

Sands Macau's revenues also declined 18% year over year to $267.9 million owing to a decline in casino, rooms and convention, retail and other revenues. Adjusted property EBITDA also declined 12.8% year over year to $76.7 million.

Non-Rolling Chip drop decreased 14.2% while Rolling Chip volume decreased 43%.

The Venetian Macau

Net revenue declined 23.4% year over year to $880.3 million at The Venetian Macau due to a decline in casino revenues. Non-Rolling Chip drop declined 7.1% year over year while Rolling Chip volume decreased 39.7%.

Adjusted property EBITDA was down 25.8% year over year to $321.4 million in the reported quarter.

Sands Cotai Central

Net revenue at Sands Cotai Central fell 10.8% year over year to $705.0 million owing to a 13.6% decline in casino revenues. However, the decline in casino revenues was partially offset by an increase in room and mall revenues.

Non-Rolling Chip drop increased 10.6% while Rolling Chip volume declined 52.3% year over year. Adjusted property EBITDA was $220.3 million, down 7.4% year over year.

Las Vegas Operations

Net revenue from the Las Vegas operations, which comprise The Venetian Las Vegas and The Palazzo, decreased 6% year over year to $362.6 million, mainly due to a decline in casino, room and food and beverage revenues. Table Games Drop declined 15.6% year over year.

Adjusted property EBITDA also fell 11.6% year over year to $78.0 million.

Sands Bethlehem, Pennsylvania

Net revenue at Sands Bethlehem was $133.6 million in the quarter, up 7.7% year over year attributable to increases in casino, room and mall revenues. Table Games Drop was up 8.1% year over year. Adjusted property EBITDA increased 19.5% year over year to $133.6 million in the quarter.

2014 Results

In 2014, earnings of $3.58 beat the Zacks Consensus Estimate of $3.47 by 3.2% and were up 23.4% year over year. Net revenue of $14.6 billion was up 5.9% year over year.

Our Take

Las Vegas Sands’ earnings managed to beat the Zacks Consensus Estimate on strength in mass gaming in Macau. However, the trend of declining revenues from VIP gamblers in Macau is expected to remain a concern for the company in the near term. This would keep revenues under pressure, going forward.

Other companies that are also bearing the brunt of a weak gambling business in Macau include Wynn Resorts Ltd. (WYNN - Analyst Report), MGM Resorts International (MGM - Analyst Report), and Melco Crown Entertainment Ltd. (MPEL - Snapshot Report).

Las Vegas Sands presently has a Zacks Rank #5 (Strong Sell).