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Gaming Guru

Howard Stutz

Ameristar Casinos reports quarterly loss

9 May 2008

LAS VEGAS, Nevada -- Ameristar Casinos reported a loss Thursday of $77.1 million during the first quarter, blaming a noncash impairment charge of $129 million related to the company's purchase of a riverboat casino in East Chicago, Ind.

The Las Vegas-based casino operator had costs of $1 million related to the rebranding of the former Resorts East Chicago and an $800,000 charge related to an expansion project at the Ameristar St. Charles casino near St. Louis.

A year ago, Ameristar reported earnings of $49.9 million. The loss translated into a loss per share of $1.07 in the quarter, compared with earnings per share of 41 cents last year.

Revenues, however, grew 23.4 percent, to $324.8 million from $259.1 million.

"From an operating perspective, Ameristar's first-quarter performance was generally in line with our internal expectations," company Chief Executive Officer John Boushy said. "We held our own and retained our prominent market positions in the face of continued weakness in economic conditions and increased competition in several markets."

Ameristar completed the purchase of the East Chicago casino for $675 million in September and has been rebranding the property with the Ameristar name. The company also operates casinos in Kansas City, Mo., Colorado, Mississippi, Iowa and in Northern Nevada.

Cash flow for Ameristar was $79.3 million, compared with $73.8 million for the same quarter last year.

Gaming analysts were not taken aback by Ameristar's quarterly loss.

"As has been the case this earnings season, we think investor expectations have been pretty low heading into Ameristar's release and don't think these results will surprise many given the monthly jurisdictional gaming revenue reports through the first quarter," Bear Stearns gaming analyst Joe Greff said in a note to investors. "Results reflect soft gaming, consistent with operator regional gaming operators."

Ameristar shares rose 11 cents, or 0.64 percent, to close at $17.25 on the Nasdaq National Market.