Las Vegas-based Ameristar Casinos reports $100 million loss

Wall Street found some positive news in Ameristar Casinos fourth-quarter earnings announcement Tuesday, despite the Las Vegas-based casino operator's net loss of $101.1 million, due largely to an impairment charge related to its purchase of a riverboat casino outside Chicago.

Ameristar, which does not operate a Las Vegas resort, reported a loss of $1.77 per share, compared with net income of $8.2 million, or 14 cents per share, in the same quarter a year ago. Analysts surveyed by Thomson Reuters, who generally exclude one-time items from estimates, predicted a profit of 16 cents per share.

Without the charge of $185.5 million, which was offset by cost-saving initiatives and increased cash flow, Ameristar would have earned 20 cents a share in the quarter that ended Dec. 31.

"Ameristar reported a generally solid quarter and provided additional evidence that regional gaming revenues could be stabilizing and that these operators can do more to control expenses," Goldman Sachs gaming analyst Steven Kent told investors Tuesday.

The company was also boosted by positive news out of Missouri. Statewide gaming revenues jumped 10 percent in January to $145.7 million. Ameristar operates casinos in both the St. Louis and Kansas City markets. In November, voters in Missouri removed a loss limit in favor of more liberal gaming in the state's casinos. Ameristar spent $7.6 million in support of the ballot initiative.

"We anticipate continued positive results from the Missouri regulatory reforms as we fully exploit the operational changes at our St. Charles and Kansas City properties," Ameristar CEO Gordon Kanofsky said during a conference call with analysts.

During the fourth quarter, Ameristar's net revenues in the quarter were $293.6 million, a 3 percent decline compared with $302.8 million a year ago. Still, company executives were pleased because cost-savings in several areas allowed Ameristar to improve cash flow by $1.9 million in the quarter. Ameristar said it reduced salaries by $2.6 million in the quarter and almost $6 million in the year.

"Achieving improved year-over-year adjusted (cash flow) in this challenging economic environment was a result of the successful implementation of our previously announced management initiatives, which are on track to generate annualized savings of approximately $45 million," Kanofsky said.

Ameristar executives said the company was in active discussions with its senior lenders concerning an amendment to its credit facility, The company, ended the quarter with total debt of $1.65 billion, is in danger of being noncompliant with its debt covenants.

Shares of Ameristar closed at $10.08 on the Nasdaq National Market, up 4 cents or 0.40 percent.

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