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Earnings stay flat for Ameristar Casinos

LAS VEGAS, Nevada -- Regional gaming operator Ameristar Casinos kept its net income relatively flat in the third quarter despite a nearly 7 percent decline in revenues.

The Las Vegas-based company said Wednesday it earned $14.5 million, or 25 cents a share, in the quarter ended Sept. 30. A year ago, the company reported net income of $14.3 million, also 25 cents per share.

The latest earnings-per-share figure met the forecast of analysts polled by Thomson Reuters.

Companywide revenue fell 6.8 percent to $299.4 million from $321.4 million.

Ameristar said a bright spot was the company's Ameristar Black Hawk in Colorado. Revenues grew 24.2 percent ahead of October's opening of a 536-room hotel tower and casino expansion. Company executives said the Black Hawk casino, located about 40 miles outside Denver, benefited from a liberalization of Colorado's gaming laws.

However, poor results at the company's casinos in Vicksburg, Miss., and East Chicago, Ind., offset the performance in Black Hawk.

"Ameristar's third-quarter results reflect the mixed regional market trends and are likely not that surprising given that several other regional operators have already reported (earnings)," Goldman Sachs gaming analyst Steven Kent told investors.

Ameristar Chief Executive Officer Gordon Kanofsky said the company's casinos in Missouri also benefited from looser gaming rules implemented late last year.

"In the third quarter, Ameristar once again demonstrated its ability to produce solid financial results during challenging economic conditions," Kanofsky said.

Throughout the year, casino operators have told investors gamblers pulled back on their spending during the recession. Many companies reduced costs.

During the quarter, Ameristar cut operating expenses to $248.5 million from $275.2 million. The company trimmed operating expenses related to casinos, food and beverage and rooms.

"Over the last 12 months, we have substantially reduced operating costs and believe we can sustain these savings," Kanofsky said.

Oppenheimer gaming analyst David Katz said Ameristar needs to shore up its efforts in some of the seven markets in which it operates.

"We believe the key challenge for the company will be to solidify the performance across the entire portfolio despite beneficial regulations in some markets and competitive pressures in others," Katz said.

Ameristar shares rose 64 cents, or 4.16 percent, Wednesday to close at $16.01 on the Nasdaq National Market.

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