Apr. 30, 2009--Ameristar Casinos gave investors a double-dose of good news Wednesday.

The Las Vegas-based regional casino operator reversed a first-quarter loss by increasing net income and earnings per share during the three-month period that ended March 31. Also, a quarterly cash dividend for shareholders that was suspended last fall, was reinstituted.

Investors responded by sending shares of Ameristar to its largest single-day price increase in months on the Nasdaq National Market.

Ameristar, which operates eight casinos, primarily in the South and Midwest, mirrored the results of other regional casino operators, such as Penn National Gaming and Pinnacle Entertainment last week. Quarterly earnings from both companies beat Wall Street expectations.

Shares of Penn and Pinnacle jumped to large price gains Wednesday on Ameristar's coattails.

"Regional trends continue to stabilize and the operating leverage has generally turned positive," Goldman Sachs gaming analyst Betsy Gordon told investors. "Ameristar reported a solid first quarter, creating a string of earnings beats among the regional casino operators."

Ameristar earned $29.9 million in the quarter, compared with a loss of $60.9 million in the same quarter last year. The figure translated into earnings per share of 52 cents, compared to a loss of $1.07. The results beat the 33 cents-per-share estimate of analysts polled by Thomson Reuters.

Company revenues declined 2.7 percent to $315.8 million in the quarter, compared with $324.8 million a year ago.

The declining economy and new competition Ameristar faces in Indiana and Mississippi were reasons for the revenue declines, said Ameristar Chief Executive Officer Gordon Kanofsky.

"Five of our seven locations reported double-digit percent improvements in adjusted (cash flow), and all of our properties increased adjusted (cash flow) margin over the prior-year quarter," Kanofsky said

"The successful implementation of our restructuring companywide has produced this significant improvement in profitability," he also said.

Ameristar also announced a 10.5 cents-per-share dividend, payable on May 19. The company decided to restart the dividend program because of an amendment the company reached with its lenders in March increased its borrowing flexibility.

Kanofsky said Ameristar's casinos in Kansas City, Mo., and St. Charles outside St. Louis, and the company's casino in Black Hawk, Colo., benefited from more liberalized gaming that was approved by voters in both states last year.

Kanofsky said the company will continue to cut costs while adjusting operations and marketing efforts to handle any twists the company will face during the current recession.

"Despite expected continued difficult economic conditions in 2009, we believe Ameristar is well positioned to continue to drive year-over-year margin growth," Kanofsky said.

Shares of Ameristar gained more than 25 percent in value at the outset of trading Wednesday. They closed Wednesday at $18, up $3.06, or 20.48 percent. More than 3 million shares were traded, four times the average daily volume.

"While we and other investors were bracing for strong regional results from Ameristar heading into today's release, we believe (the company) exceeded on the margin front and hence, we expect the stock to react favorably to the results," JPMorgan gaming analyst Joe Greff wrote in a research note.

Penn National Gaming closed up $1.61, or 5.14 percent, at $32.91. Pinnacle Entertainment finished up 67 cents, or 5.78 percent, at $12.27.

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