UPDATE 2-Pinnacle Entertainment posts Q2 profit, shrs rise

* Net profit 8 cents/shr vs. loss, revenue flat

* Excluding items, profit 1 cent/shr vs 5-cent street view

* Amends bank credit agreement

* Shares up over 11 percent (Adds analyst estimates, comment)

ATLANTA, July 24 (Reuters) - Casino operator Pinnacle Entertainment Inc (PNK.N) posted a quarterly profit on Friday, compared with a year-ago loss, due to cost-cutting and a gain on the sale of shares in another company.

Pinnacle also said it amended its bank credit agreement, and its shares were up 11.6 percent in late morning trading.

"The profitability performance remained solid, which suggests margin momentum from first-quarter 2009 continued," Oppenheimer analyst David Katz said in a research note. "Most important, the amendment to the bank deal provides some flexibility... although the maturity remains 2010."

Pinnacle reported a second-quarter net profit of $4.7 million, or 8 cents per share, compared with a net loss of $18.1 million, or 30 cents per share, in the same period last year.

Revenue was about flat at $266.3 million.

The company said the latest results included a gain of $12.9 billion tied to the sale of 1.2 million shares it owned in rival Ameristar Casinos (ASCA.O). Pinnacle had bought the stock in hopes of pursuing a combination of the two companies, but said it had a change of heart following changes in the debt markets.

Excluding preopening costs and the gain on Ameristar shares, Pinnacle posted a profit of 1 cent per share, falling short of the average analyst estimate of 5 cents per share, according to Reuters Estimates.

The company said the latest credit amendment includes an increase in the permitted consolidated leverage ratio and a 15 percent reduction in the facility to around $531 million.

Shares of Pinnacle were up $1.12 to $10.75 on the New York Stock Exchange.

The Las Vegas-based company operates casinos in Nevada, Louisiana, Indiana, Missouri, Argentina and the Bahamas. (Reporting by Deena Beasley and Karen Jacobs; Editing by Derek Caney and Tim Dobbyn)