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Ameristar Casinos (ASCA
) reported second-quarter earnings per share of 29 cents, vs. 27 cents. Banc of America says it is reviewing its model and maintains a neutral recommendation on the stock.
Analyst J. Cogan says second-quarter EPS was shy of the consensus and his estimate of 30-31 cents. The analyst says higher health care costs (5 cents) weighed on results; management views this as an anomaly. The analyst still likes Ameristar's operating momentum, but thinks good news is already discounted in the stock.
Cogan notes management's third-quarter EPS guidance of 30-32 cents is below his 33 cents estimate. He does not see any incremental catalysts in earnings release and outlook.
It appears management is leaning toward expanding the scope and budget of its Blackhawk property, a key growth initiative. But he says potential changes could impact the timing of a new hotel tower.