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LAS VEGAS, Nevada -- Wall Street found positive news in Ameristar Casinos' fourth-quarter earnings announcement Tuesday despite the Las Vegas-based casino operator's net loss of $101.1 million.
Ameristar, which does not operate a Las Vegas resort, reported a loss of $1.77 per share, reversing net income of $8.2 million, or 14 cents per share, a year earlier. The loss was attributed to an impairment charge related to its purchase of a riverboat casino outside Chicago.
Analysts surveyed by Thomson Reuters, who generally exclude one-time items from estimates, predicted a profit of 16 cents per share.
Without the charge of $185.5 million, which was offset by cost-saving initiatives and increased cash flow, Ameristar would have earned 20 cents a share in the quarter ended Dec. 31.
"Ameristar reported a generally solid quarter and provided additional evidence that regional gaming revenues could be stabilizing and that these operators can do more to control expenses," Goldman Sachs gaming analyst Steven Kent told investors Tuesday.
Positive news out of Missouri also boosted the company. Statewide gaming revenues jumped 10 percent in January to $145.7 million. Ameristar operates casinos in both the St. Louis and Kansas City markets. In November, voters in Missouri removed a loss limit in favor of more liberal gaming in the state's casinos. Ameristar spent $7.6 million backing the ballot initiative.
"We anticipate continued positive results from the Missouri regulatory reforms as we fully exploit the operational changes at our St. Charles and Kansas City properties," Ameristar Chief Executive Officer Gordon Kanofsky said during a conference call with analysts.
During the fourth quarter, Ameristar's net revenues were $293.6 million, a 3 percent decline from $302.8 million a year ago. Still, company executives were pleased because cost-savings in several areas allowed Ameristar to improve cash flow by $1.9 million in the quarter. Ameristar said it reduced salaries by $2.6 million in the quarter and almost $6 million in the year.
"Achieving improved year-over-year adjusted (cash flow) in this challenging economic environment was a result of the successful implementation of our previously announced management initiatives, which are on track to generate annualized savings of approximately $45 million," Kanofsky said.
Ameristar executives said the company was talking with its senior lenders about an amendment to its credit facility. The company, which ended the quarter with debt of $1.65 billion, is in danger of being unable to meet its debt covenants.
Meanwhile, the company said it hoped to open a $245 million expansion of the Ameristar Black Hawk in December. The property is in Black Hawk, Colo., 40 miles west of Denver.
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