The decline in Macau may not be over yet, but Las Vegas Sands is handling it better than the market currently perceives. Earnings were a bitter disappointment and the stock is down 13% since the release. There are significant positives from this earnings release though that bode well for the future, at least withregard to LVS. That is, the casino is gaining efficiency since having been tried by the Macau collapse. This might not be visible from the overall income statement because operating expenses were higher as a percentage of revenue than last year’s first quarter. Look deeper though and you’ll find that’s not because of Macau. Besides, it could have been much worse considering the collapse in gaming volume.

Here’s a breakdown of the major Macau properties and you’ll see what I mean.

Venetian Macau

Counting rolling chip and non-rolling chip volume and slot handle, total gaming volume was down 3.3%. Hotel occupancy was also down 8pts, and the revenue per available room down 24%. Across the board, less people are coming and less money is being staked year over year. The absolute loss in gaming volume or money staked was $382.4M. Nevertheless, despite all that, operating income was still up 1.8%.