Ameristar net income falls in the third quarter


Regional gaming operator Ameristar Casinos said its net income in the third quarter fell 17 percent due to weak consumer spending.

The Las Vegas-based company, which put itself up for sale in August, said its net income for the period that ended Sept. 30 was $11.9 million, or 20 cents per share, down from $14.5 million, or 25 cents per share, the company reported a year ago.

Analysts polled by Thomson Reuters were expecting net earnings of 21 cents per share.

Revenue for the company, which operates eight casinos in seven regional markets, was almost flat at $299.6 million.

"The third quarter produced a solid and steady financial performance," Ameristar CEO Gordon Kanofsky said in a statement. "Our key financial metrics … generally reflected signs of stabilization in this difficult economic environment."

Kanofsky said two of the company's larger casinos saw earnings stabilize, despite challenges in the quarter. Results at Ameristar's casino in East Chicago, Ind., has been hurt by a bridge closure that diminished road access to the property while Ameristar St. Charles in the St. Louis market regained some business lost to the opening a new casino opened by rival Pinnacle Entertainment in suburban St. Louis.

Kanofsky did not provide any comments on the company's potential sale.

In August Ameristar said it hired an investment bank to explore a potential sale of the company.

Talk of a potential buyout has swirled around Ameristar since the 2006 death of its founder Craig Neilsen, whose estate, including a more than 50 percent stake in Ameristar, went to a foundation that focuses on spinal cord research.

Jefferies & Co. gaming analyst David Katz said investors are more interested in the company's sale prospects rather than performance.

"We believe Ameristar's results are generally neutral for the shares, as there was little surprising in the results," Katz said. "However, we believe the shares trade more on the prospects of ownership changes than operating performance, on which there appears to be little new information."

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.

 

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