Ameristar Casinos report fourth-quarter decline

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Ameristar casino. | File Sun-Times Media

Updated: March 3, 2012 11:35AM

Ameristar Casinos, which operates a casino in East Chicago, on Wednesday reported a decline in fourth-quarter profits, which it said largely was due to an increase in stock-based compensation expenses.

The Las Vegas-based gaming company reported net income of $7.4 million, or 22 cents a share, for the three-month period ending Dec. 31. This compares with net income of $10.9 million, or 18 cents a share, for the same period one year earlier. Adjusted earnings were 21 cents compared to 19 cents in the previous fourth quarter.

Net revenue for the quarter rose to $296.2 million from $294.1 million, with lower promotional costs and better late December weather at most properties, including East Chicago.

While several of the company’s properties posted improved revenues, Ameristar in East Chicago posted a 2.6 percent year-over-year decline, which the company attributed primarily to new competition from The Rivers Casino in Des Plaines, Ill.

Ameristar said the decline was partially offset by an improved market share among the Northwest Indiana casinos.

The company’s earnings missed analysts’ expectations by 13 cents per share. Analysts expected earnings of 34 cents a share and revenue of $295.9 million.

For the full year, Ameristar reported net income dropped from $8.6 million in 2010 to $6.8 million in 2011, partially due to a pre-tax loss on early retirement of $85.3 million in debt, $55.1 million on an after-tax basis. An East Chicago impairment charge negatively impacted 2010 by $33.2 million on an after-tax basis.

In a conference call Wednesday morning, Ameristar CEO Gordon Kanofsky said the company broke its EBITDA record by $18.6 million and set a new record by 1.6 percentage points.

EBITDA stands for earnings before interest, taxes, depreciation and amortization.

“Our ability to generate significant free cash flow has allowed us to make substantial debt repayments, increase our quarterly dividend and opportunistically repurchase shares and pursue growth,” Kanofsky said.

Shares in Ameristar Casinos Inc. rose $1.38, or 7.06 percent, from $19.56 to $20.95 in mid-day trading on Wednesday.