Ameristar's hot revenue streak ends

Ameristar Casinos 2Q results short of Wall Street expectations, shares drop

Associated Press

LAS VEGAS (AP) -- Ameristar Casinos returned to a second-quarter profit but acknowledged that gamblers have pulled back on spending, leading to a shortfall in Wall Street's eyes.

Shares of Ameristar fell nearly 6 percent.

The Las Vegas owner and operator of eight casino-hotels reported net income for the three months ended June 30 of $17.6 million, or 51 cents per share. That compared with a loss of $41.3 million, or $1.10 per share in the same quarter a year ago, when it took a hit on early debt retirement.

But revenue slid 2.9 percent to $296.3 million. Casino revenue fell nearly 3 percent, while revenue from food and beverage sales and rooms were essentially flat.

Wall Street was looking for profits of 59 cents per share, according to FactSet, and revenue of $301.2 million.

The company is seeing increased competition in Kansas City, Mo. and in East Chicago, Ind. Those properties reported revenue declines of nearly 9 percent and 6 percent, respectively, compared with the year-ago quarter.

Revenue in Jackpot, Nev., where local highway work and hotel renovations disrupted operations, revenue fell 10 percent.

"''The combination of new competition, construction disruption and a pull-back in consumer discretionary spending impacted the quarter," said CEO Gordon Kanofsky. "As a result, we were unable to continue our lengthy year-over-year quarterly increases in net revenues."

That string goes back seven quarters, to June 2010.

Construction on the company's ninth property, a casino resort in Lake Charles, La., began in July. That location is expected to open in the third quarter of 2014, at a cost of $560 million to $580 million. That figure includes the purchase price, but excludes capitalized interest and pre-opening expenses.

Shares of Ameristar Casinos Inc. fell 94 cents to $15.93. The stock has traded in a range of $14.60 to $23.47 over the past 12 months.

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