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LAS VEGAS, Nevada –- Ameristar Casinos strengthened its balance sheet in the past few months, but budget-conscious customers didn't spend as much on gambling and other activities during the second quarter.
Las Vegas-based Ameristar, which operates casinos in regional markets, said its profit for the quarter ended June 30 dropped 16 percent compared with a year ago. Ameristar also incurred increased borrowing costs related to its debt restructuring.
Ameristar reported net income of $14.3 million, or 25 cents per share, in the quarter, down from $17 million, or 29 cents per share, a year earlier. Analysts polled by Thomson Reuters, whose estimates normally exclude one-time items, expected earnings of 38 cents per share.
Companywide revenues in the quarter were $328.1 million, a decline of 5.9 percent compared with $308.9 million a year ago.
"Although the year-over-year decline in business levels continued in the second quarter, we are confident the flexible operating cost structure we put in place over the past year and continue to refine will enable us to continue to align costs with business volumes," Ameristar Chief Executive Officer Gordon Kanofsky said in a statement.
Ameristar said the company's casinos in Northern Nevada; Kansas City, Mo.; Black Hawk, Colo.; and East Chicago, Ind.; all met or exceeded expectations.
Kanofsky said the strong results in Black Hawk came before more liberalized gaming laws took effect in the community on July 2. Ameristar plans on opening a luxury hotel tower at Ameristar Black Hawk on Sept. 29.
He added that the company's cost-cutting plans to save between $45 million and $55 million in annual costs, should offset lost revenues due to the economy.
"Our leaner cost structure, which enables us to more nimbly adjust variable costs based on business volumes, will allow us to more efficiently manage our business going forward," Kanofsky said.
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