Citing heavy construction work near one of its properties as the reason for poor performance, Ameristar Casinos, Inc. reported lower than expected financials for the second quarter of 2010.
Ameristar Casinos, a publicly traded company (NASDAQ: ASCA), released its critical financial information for the second quarter 2010 last week, with the numbers showing a downturn in performance. Ameristar, which owns properties in Colorado, Iowa, Indiana, Nevada, Missouri, and Mississippi, reported that consolidated net revenues for the properties were down $15.9 million versus the same time period in 2009. Ameristar’s Chief Executive Officer Gordon Kanofsky gave several reasons for the loss.
“All of our properties performed quite well during the second quarter, with the exception of Ameristar East Chicago (Indiana),” Kanofsky stated during the financials announcement. “Although our East Chicago property’s financial results were adversely affected by a nearby bridge closure to a degree much greater than originally anticipated, the rest of our property portfolio produced solid year-over-year results that were consistent with our expectations going into the second quarter.”
Taking away the poorly performing Ameristar East Chicago property, Ameristar would have been able to show a 2.9% rise in clean EBITDA in 2010 versus 2009.
The East Chicago property wasn’t the only one to have issues. In Missouri, Ameristar St. Charles showed net revenues and adjusted EBITDA declining by 11.6% and 14.2%, respectively, from the prior year’s second quarter. The financial report states the reason for the decreases was mostly due to the entry of a new competitor into the highly active St. Louis gaming market.
Overall for the second quarter, Ameristar’s consolidated net revenues fell 5.1%, from $308.9 million in the prior year to $293.0 million. For the three months ended June 30th, Ameristar Casinos incurred a net loss of $24.9 million, or $0.43 per diluted share, compared to net income of $14.3 million, or $0.25 per diluted share, for the quarter ended June 30th, 2009.
Kanofsky has a bright outlook for Ameristar Casinos when it comes to the remainder of 2010: “As we look into the third quarter, we are optimistic regarding the performance of the properties in our more stable markets, including Kansas City, Council Bluffs, and Vicksburg.” Each of those properties, along with the company’s newest location in Colorado, has undergone changes that lead Kanofsky to believe that they will continue to be the flagships of the Ameristar Casino armada.
“We anticipate Black Hawk (Colorado) will continue to produce year-over-year growth based on the new hotel and related amenities despite reaching the July anniversary of the regulatory changes,” Kanofsky reported. “We also expect some opportunities for growth in Missouri, as both of our properties have been permitted to operate 24 hours daily – except for one hour each Wednesday morning – since July 1st, 2010. Prior to the change in operating hours, our Missouri properties were required to be closed for three hours per day on non-holiday weekdays.” These changes, Kanofsky feels, will add to Ameristar’s bottom line even more significantly through the remainder of the year.
The second quarter reports have caused a bit of fluctuation for Ameristar Casinos’ stock. After trading as high as $16.47 starting the week, the price began to come down prior to the announcement of the second quarter numbers on Wednesday. After the announcement, Ameristar’s stock dropped to $14.94 by the end of trading on Friday, roughly 9.2%.
