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Ameristar Casinos posts quarterly gain on declining revenues6 August 2012
By Howard Stutz
The Las Vegas-based company, which has eight hotel-casinos, reported that its net income for the three months that ended June 30 was $17.6 million, or 51 cents per share. A year ago, Ameristar took a net loss of $41.3 million, or $1.10 per share because of the early retirement of some debt obligations.
However, companywide revenue fell almost 3 percent, to $296.3 million.
Ameristar officials said competition from new casinos in Kansas and other regional markets caused a 9 percent decline in revenues at the Ameristar Kansas City (Mo.) and a 6 percent decline at Ameristar East Chicago in Indiana.
Revenue from Ameristar's Nevada operations, in Jackpot near the Idaho state line, declined 10 percent because highway construction and hotel renovations disrupted operations.
"The combination of new competition, construction disruption and a pull-back in consumer discretionary spending impacted the quarter," Ameristar Chief Executive Officer Gordon Kanofsky said in a statement. "As a result, we were unable to continue our lengthy year-over-year quarterly increases in net revenues."
Analysts polled by FactSet Research expected Ameristar to report profits of 59 cents per share.
"Results were a bit of a disappointment from a management team that is known for adapting to market conditions quickly," said KDP Investment Advisors gaming analyst Barbara Cappaert.
Ameristar said construction began in July on the company's ninth property, a casino resort in Lake Charles, La. That location is expected to open in 2014 at a cost of $560 million to $580 million. The figure includes the purchase price.
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