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LAS VEGAS-The Applied Analysis Gaming Index hit another all-time high in January, surpassing 500 on the strength of Las Vegas Sands, MGM Mirage and Wynn Resorts. The index, which tracks the daily average stock price of nine publicly held gaming companies with significant operations in Nevada, was launched by locally based Applied Analysis in 1998 with a value of 100.
The 40.14 point increase in the index to 501.80 in January represents an 8.7% increase from December 2006 and a 61.2% increase from January 2006. The gain comes on the heels of a 9% gain in December. The two months mark two of the strongest expansions in the index's history (dating back to January 1998).
AA principal Brian Gordon lists several factors as contributing to the spike, including increasing market expectations in Macau, China, which is expected to outpace the Strip in gross gaming revenue in 2007; investor speculation of additional privatizations; and healthy gaming revenues from November, which were released to the public in January.
During this past month, the average daily share prices of both Wynn Resorts and Las Vegas Sands climbed over the $100-per-share watermark while Harrah's rose the most, gaining just over 17.1% in January to an average of $65.88. Wynn's daily average rose 11.3% to $104.03 while Las Vegas Sands average rose 9.8% to $101.30.
All but one of the six other companies in the index--MGM Mirage, Boyd Gaming, Station Casinos, Bally Technologies, International Gaming Technologies and WMS Industries--saw their average daily share prices rise in January. However, because the others' gains didn't keep pace with the growth of Wynn, Las Vegas Sands and Harrah's, they were actually a negative pull on the Index, Gordon tells GlobeSt.com.
Earlier this week, Las Vegas Sands, run by billionaire Sheldon Adelson, reported a 3.3% rise in four-quarter profit on the strength of increased revenue in Las Vegas and Macau. The company earned $113.6 million, or $0.32 cents per share, on revenue of $636.3 million versus $110.1 million, or $0.31 cents a share, on revenue of $500.7 million for the same period a year ago. Adjusted earnings per share of $0.37 was above analysts' average expectation of $0.31 per share on revenue of $563.8 million.
Revenue at the Sands Macao was $345.9 million in the fourth quarter, up 27.2% from the same year-earlier period. Revenue at the Venetian in Las Vegas was $290.4 million, up 26.9% from the same year-earlier period. For all of 2006, revenue totaled $2.24 billion, up 28.5% from 2005, and net income totaled $442 million, up 55.8% from 2005.
Looking ahead, the company within its schedule and its budget for the seven casino properties it has under development in Macau. The Venetian Macao is expected to open this summer, at which point it will be the largest hotel-casino in the world. Sands also is awaiting approval by the Chinese government to build a master-planned community on Hengqin Island, and remains on track to open the Marina Bay Sands in Singapore in 2009. Back in the US, the Palazzo rising next to the Venetian in Las Vegas is set to open late this year and site work is under way for the Sands Bethworks in Bethlehem, PA.
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