A major US casino operator has acknowledged that casino visitors have cut back on spending, leading to a fall in its shares of almost six per cent.
Ameristar Casinos did, however, return to a second-quarter profit. The Las Vegas owner and operator of eight casino hotels reported net income for the three months ended June 30 of $17.6m, or 51 cents per share. That compared with a loss of $41.3, or $1.10 per share, in the same quarter a year ago, when it took a hit on early debt retirement.
But revenue slid 2.9 per cent to $296.3m. Casino revenue fell nearly three per cent, while revenue from food and beverage sales and rooms were essentially flat. Wall Street was looking for profits of 59 cents per share, according to FactSet, and revenue of $301.2m.
"The combination of new competition, construction disruption and a pull-back in consumer discretionary spending impacted the quarter," said CEO Gordon Kanofsky. "As a result, we were unable to continue our lengthy year-over-year quarterly increases in net revenues." That string goes back seven quarters to June 2010.
Construction on the company's ninth property, a casino resort in Lake Charles, Louisiana, began in July. That location is expected to open in the third quarter of 2014 at a cost of $560m to $580m. That figure includes the purchase price, but excludes capitalised interest and pre-opening expenses.
