Riviera profit decreases, Ameristar earnings up

Tuesday, April 24, 2001 | 11:06 a.m.

Two Las Vegas-based casino companies diversified in out-of-state properties reported mixed earnings results today.

Ameristar Casinos Inc., which sold its Reserve hotel-casino to Station Casinos Inc. in a deal that closed earlier this year, reported record earnings that exceeded analysts' expectations. Station announced Monday that it would rename the Reserve the Fiesta Henderson.

Ameristar, which acquired Station's two Missouri riverboat properties in Kansas City and St. Charles when it sold the Reserve, reported earnings of $26.8 million, 31 cents a share, on revenues of $152.1 million for the first quarter ending March 31.

That compares with earnings of $11.3 million, 14 cents a share, on revenues of $80 million for the same period a year earlier. Analysts surveyed by First Call/Thomson Financial had expected earnings per share of 23 cents.

Ameristar benefitted from operations at the two Missouri casinos -- the Ameristar Kansas City and the Ameristar St. Charles, near St. Louis, for the entire quarter, since the acquisition from Station closed in December. At the same time, the company held the Reserve through Jan. 29 before closing the $71.8 million deal with Station.

Ameristar also operates Cactus Petes and the Horseshu hotel-casino in Jackpot, on the Nevada-Idaho border. Those properties reported flat revenues for the quarter, attributed to slow economic conditions in southern Idaho and severe winter weather that affected visits.

The company also owns casino properties in Council Bluffs, Iowa, and Vicksburg, Miss.

Meanwhile, Riviera Holdings Corp., which operates the Riviera hotel-casino on the Las Vegas Strip and a casino in Black Hawk, Colo., reported a loss for its first quarter ending March 31.

Riviera reported a net loss of $658,000, 18 cents a share, on revenue of $52.2 million, compared with a net income of $675,000, 15 cents a share, on revenue of $49.2 million for the comparable quarter in 2000.

William Westerman, chairman and chief executive officer, said the company has implemented a $3 energy surcharge on rooms to recover the higher utility costs at its Las Vegas hotel. However, it's unclear how much revenue this surcharge will raise since Las Vegas room rates fluctuate dramatically based on demand.

The company also reported that it repurchased $2.5 million of Riviera Black Hawk Inc's 13 percent bonds.

Bob Vannucci, president of the Riviera hotel-casino, said revenues in Las Vegas were flat for the first quarter compared with the same quarter a year ago.

He said revenue declines in gaming were down $1.8 million -- about 9.5 percent -- due to the timing of the New Year's holiday, the extra day for leap year in 2000 and planned changes in the hotel's occupancy mix.

Those decreases were offset by an average increase in room rates of $8.53 for the quarter while occupancy averaged about 96 percent. Convention services revenues increased $400,000, which also dampened the decrease in gaming revenue.

Revenues were up $3.4 million to $11 million over last year at the company's Colorado property. Westerman said the company did not expect a big increase over the first quarter of 2000, when the property opened. The company has, however, benefited from a more favorable tax rate, which has improved cash flow over the past two quarters.