Those who believed that casinos that survived the hurricane would fare well as the only game in town were proved correct in the recent quarterly results of Ameristar Casinos Inc. (ASCA) whose riverboat in Vicksburg, Miss., shot up 52% as one of three gaming properties to weather the storm.
But the fourth quarter gains in Vicksburg were not enough to offset declines experienced by the company in the highly competitive Missouri gaming areas.
Still, the company that has been the favorite of a number of gaming analysts in recent years, beat the consensus by posting earnings per share of $0.27, a penny better that estimates.
Record fourth quarter consolidated net revenues of $243.8 million were achieved primarily because Ameristar’s casino in Black Hawk, Colo., contributed a full quarter of operation. This also reflected record net revenues of $961.4 million, an increase of $106.7 million or 12.5% over 2004.
Consolidated net income for the fourth quarter of $14.3 million was relatively unchanged from the previous year but the total for the year showed an increase of $4.3 million or 6.9% over the previous year.
The earnings per share figure excluded the loss the company experienced through the early retirement of senior secured credit facilities.
Of concern to analysts, however, was the company’s report that both the properties in St. Louis and Kansas City suffered declines in their operating income because the company felt it necessary to spend heavily on promotions in order to regain momentum in the areas.
Also, Ameristar is expected to encounter additional competition at its Iowa property when Harrah’s Entertainment Inc. (HET) completes its development of a racino at the dog track in Council Bluffs.
Still, Craig Neilsen, chairman and CEO, remained positive about the area.
"We have made substantial progress on our Mountain High renovation and expansion and expect to re-brand the property under the ”˜Ameristar’ name in April 2006," he said.
"As part of the re-branding, Ameristar Black Hawk will feature an expanded parking garage that nearly doubles its previous capacity, a remodeling of the first and second floor gaming and non-gaming venues and an expansion of the casino’s second floor that will allow for an additional 700 slot machines," he added.
Combining the profit made from the sale of real estate and from its slots operation, Dover Downs Gaming & Entertainment Inc. (DDE) reported earnings for the fourth quarter of $9.2 million compared to $2.5 million in the fourth quarter of 2004.
The gain on the sale of commercial real estate amounted to $5.8 million.
On a pro-forma basis excluding the real estate gain, the company said, earnings per diluted share increased 60% to $0.24 per share. A year earlier, the earnings per diluted share were $0.15.
Revenues for the fourth quarter moved up to $54 million compared to $51 million in the comparative period.
But the most encouraging prospect, the company said, was action in the Delaware legislature that would allow Dover Downs to expand the slot machine floor from the current 2,500 machines to 4,000 machines.
The legislation has passed both houses and awaits the signature of the governor who it was reported planned to sign it into law.
Also last week, the company announced that it would pay its regular quarterly dividend of $0.06 per share on March 10 to shareholders of record on Feb. 10.