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Shares of Las Vegas Sands Corp. sank to an all-time low Friday as an analyst slashed 2009 and 2010 adjusted earnings estimates following the casino operator’s capital infusion, which led to an increased number of outstanding shares.
Late last week Sands completed an offering of common stock, preferred stock and warrants that provided about $2.1 billion of additional capital. The move more than doubles the number of outstanding shares and significantly dilutes shareholder value.
Earlier this week the Las Vegas-based casino operator said doubts about its ability to continue as a going concern had been removed after the offering’s completion. Las Vegas Sands’ independent accountants, PricewaterhouseCoopers LLP, said in a filing with the Securities and Exchange Commission Monday that the actions taken Friday helped to erase worries about the company’s ability to continue to operate.
BMO Capital Markets analyst Jeffrey Logsdon said in a client note that his new earnings estimates account for the increase in shares as well as the preferred stock’s earnings impact and a more cautious stance on the Las Vegas and Macau markets.
The casino sector has been pressured as consumers curb spending due to the ongoing housing slowdown, eroding credit and rising food costs. Several companies have had to delay or abandon development projects recently due to funding concerns.
Logsdon dropped his 2008 adjusted profit forecast to 6 cents per share from 9 cents per share. He cut his 2009 estimate to 6 cents per share from 43 cents per share and reduced his 2010 prediction to 21 cents per share from 66 cents per share.
Logsdon maintained a “Market Perform” rating and a $7 price target.