On November 6th, 2007, buying an Indiana riverboat casino facility situated outside the casino industry of Chicago helped wide widen the business reach of the Ameristar Casino but integrating the riverboat casino into the company’s goals had a bad impact on the 3rd quarter earnings of Ameristar.
Ameristar, which is based in Las Vegas, commented that their net income for the three month period until September 30th was $20 million or 34 cents per company share. That result included a net loss of $800,000 from the Resorts East Chicago, which was bought on September 18th for $675 million. Just a year ago, Ameristar stated a net income of $21.1 million or 37 cents per share.
Analysts said that they expect Ameristar to get 35 cents per share in the latest quarter. The company said that their revenues for the quarter were $265.4 million and that figure included the $9.2 million from buying the Resorts East Chicago. The company’s profits during the same period of the year ago were $253.6 million.
Ameristar President and Chief Executive Officer John Boushy commented that they have succeeded in producing bigger net profit from four of their six casinos and they have achieved good companywide revenue event with the smaller development in most of their casino market during the 3rd quarter of the year.
Ameristar said that the total cost of the integration of the Resorts East Chicago were $1.1 million. Boushy said that the Ameristar casino expects to shell out between $20 million up to $25 million on the Resorts East Chicago to rename it as a property of Ameristar by September 2008.
Ameristar Officials refused to confirm rumors on Wall Street that Ameristar might be on the selling block. Just last month, the property of company founder Craig Nielsen, who passed away in November 2006 commented that they may pursue one of the options for their 55% stake in the casino.
Craig Nielsen’s estate owns about 31.5 million shares of the Ameristar, which is listed on the NASDAQ National Market. In a statement filed before the Securities and Exchange Commission, the Nielsen estate commented that they may consider selling all or a part of their interest in the company. They are also considering a merger that could change the control of the company.
Ameristar has several expansion activities which have a total of $344 million like the 400 room hotel tower at the Ameristar St. Charles, which is expected to open on December. Ameristar has a planned expansion at the Ameristar Vicksburg in Mississippi worth $98 million.
The company is also planning a $100 million expansion project in Council Bluffs, Iowa. The construction of the hotel at Ameristar’s Black Hawk Casino has been delayed because of rock slides. Even with the different expansion projects, Ameristar co-chairman Gordon Kanofsky commented that they will continue their acquisitions. Ameristar’s shares slide down $1.44 or 4.5% to close down at $30.51 after the NASDAQ closed.
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