Ameristar quarterly net loss increases

Ameristar Casinos' net loss increased in the second quarter despite strong financial results from several of the Las Vegas-based company's regional casinos in the South and Midwest.

Ameristar officials said Wednesday that the company's net loss in the quarter that ended June 30 was $41.3 million, or $1.10 per share. In the same quarter a year ago, the company lost $24.9 million or 43 cents per share.

Net revenues for the company grew 4.1 percent to $305.09 million compared with $293 million in the second quarter of 2010.

In a statement, Ameristar said the net loss was because of a pre-tax loss on early retirement of $85.3 million in debt and by a $3.5 million noncash adjustment because of a change in Indiana state tax rate.

"Three of our four key financial metrics reached their highest levels ever in a second quarter," Ameristar Chief Executive Officer Gordon Kanofsky said in a statement.

Analysts said that despite the net loss, they were bullish on Ameristar's overall prospects.

"We believe Ameristar's second-quarter results are ahead of recent expectations and points toward continued stabilization in regional gross gaming revenue trends as well as a more rational promotional spending environment," JP Morgan gaming analyst Joe Greff told investors.

Company officials credited increased cash flow at the Ameristar casinos in Kansas City, Mo., Council Bluffs, Iowa, St. Charles, Mo., and Jackpot for boosting the overall balance sheet beyond the net loss.

Company officials cited strong financial performances from all its properties, including Ameristar Vicksburg in Mississippi and Ameristar Council Bluffs, which remained open throughout the quarter despite regional flooding.

Deutsche Bank gaming analyst Andrew Zarnett looked beyond the company's quarterly results, saying the $2.2 billion in new debt financing raised during the quarter significantly extended Ameristar's debt maturity profile.

Zarnett said the financing provides the company "with ample financial flexibility to focus on existing operations and potential growth opportunities."

Contact reporter Howard Stutz at hstutz@reviewjournal.
com or 702-477-3871. Follow @howardstutz on Twitter.