Earnings reports mixed for smaller LV casino operators

Monday, Aug. 14, 2000 | 10:56 a.m.

Coast Resorts Inc. of Las Vegas today reported increased revenues for the quarter ending June 30, as the company prepares to open its fourth property in the Las Vegas area.

Coast, the second-largest locals casino operator in Las Vegas, posted revenues of $94.5 million for the quarter ending June 30, a 6.7 percent increase over the year-ago quarter. Cash flow rose 15.5 percent to $22 million, while net income increased 49 percent to $7 million.

The biggest push in Coast's earnings came in casino revenue, which rose 6.5 percent to $68.7 million during the quarter. Coast attributed this increase to generally increased wagering activity at each of its three Las Vegas properties.

Hotel revenues saw an increase of 10 percent to $8.2 million, despite a decline in occupancy rates during the quarter. The increase was the result of rising room rates -- Coast posted average daily room rates of $56 for the quarter, up from $50 in the second quarter of 1999.

Coast operates the Gold Coast and the Orleans, both located near the Strip. It also operates Barbary Coast, located just south of the Flamingo Hilton on the Strip. Its fourth local property, the $185 million Suncoast, is expected to open near Summerlin on Sept. 1.

Also reporting increased revenues for the quarter was locals casino operator Ameristar Casinos Inc. of Las Vegas, though the company reported poorer bottom-line earnings.

For the quarter ending June 30, Ameristar recorded net revenues of $84.1 million, an increase of 10.4 percent over the year-ago period and a record for the company. The Las Vegas company attributed this gain to expansions at its properties in Iowa and Mississippi, the introduction of new slot machines and the roll-out of enhanced marketing programs.

However, stronger earnings did not translate into better performance at the bottom line. Ameristar posted cash flow of $13.2 million for the quarter, down 1 percent. The company posted a net loss of $483,000, or 2 cents per share, compared to net income of $779,000, or 4 cents per share, in the year-ago quarter.

Earnings for the quarter were hurt by Ameristar's unsuccessful bid to land a casino license near St. Louis, which resulted in $1.4 million, or 4 cents per share, in development costs during the quarter.

The company's lone property in the Las Vegas area, the Reserve in Henderson, continued to show losses during the quarter, though results improved. The Reserve recorded an operating loss of $200,000 during the quarter, compared to a loss of $2.1 million in the year-ago quarter, while revenues increased 16 percent. Ameristar said it will continue to "seek further operational improvements at the Reserve through enhanced revenues and cost controls."

In addition to the Reserve, Ameristar operates casinos in Council Bluffs, Iowa, Vicksburg, Miss., and Jackpot, Nev.

Also reporting earnings was Elsinore Corp., the owner and operator of the Four Queens hotel-casino in downtown Las Vegas.

During the quarter ending June 30, Elsinore recorded revenues of $14.5 million, down 2 percent from the 1999 quarter. Cash flow fell 2.4 percent to $3.1 million.

Elsinore blamed decreased revenues and cash flows primarily on a decrease in slot promotion revenue, but said the decreases were offset by payments received in a settlement agreement with the Twenty-nine Palms Band of Mission Indians, which earlier pulled out of a casino management agreement with Elsinore. Casino revenues fell 9.4 percent to $9.2 million.

Despite the declines in cash flow and revenues, Elsinore posted a net profit of $638,000 for the quarter, up 9.6 percent from the year-ago quarter.