Ameristar Casinos reports profit increase

Nov 4, 2009 8:48 PM
Staff & Wire Reports |

Ameristar Casinos Inc. (ASCA) said Wednesday that its profit edged up in the third quarter, helped by lower operating expenses, a lower tax rate and an uptick in room revenue.

The casino operator's earnings rose 1 percent to $14.5 million, or 25 cents per share, compared with $14.3 million, or 25 cents per share, a year ago.

Adjusted profit was 27 cents per share, which removes pre-opening costs related to Colorado's Black Hawk hotel that debuted in September.

Related Articles:
Casinos in crisis -- marketing missing the mark
Casinos in crisis Part 2: Back to Basics
Casinos in crisis Part 3: Promotions target lost customers
Also Check out our Race & Sports Section

The performance met the forecast of analysts polled by Thomson Reuters, whose estimates generally exclude one-time items.

Revenue dropped 7 percent to $299.4 million from $321.4 million as people spent less money on food and beverages and gambling. Room revenue was a bright spot, up 1 percent to $16.6 million from $15.9 million. While a minimal gain, most casino operators have also struggled with declining room revenue, so any gain is a positive sign.

Still, the total revenue results missed Wall Street's estimate of $316.7 million.

Casino operators have watched gamblers pull back on their spending during the recession and have dealt with the monetary drain in part by reducing their costs.

Ameristar cut its operating expenses to $248.5 million from $275.2 million in the quarter, while its tax rate declined to 33.2 percent from 44.7 percent. The casino operator trimmed operating expenses related to casinos, food and beverage and rooms. It also trimmed its selling, general and administrative expenses.

The company's stock added 55 cents, or 3.6 percent, to $15.92 in morning trading.

Question? Comment? E-mail the staff at: Staff of GamingToday