UPDATE 3-Ameristar 4th-qtr profit rises nearly 25 pct

(Recasts, adds company comments, updates stock price)

By Deena Beasley

LOS ANGELES, Feb 1 (Reuters) - Ameristar Casinos Inc. (ASCA.O), which operates mainly in the U.S. Midwest, said on Thursday its fourth-quarter profit rose nearly 25 percent as it spent less money on promotions.

The Las Vegas-based casino operator, which is 56-percent owned by the estate of its late founder Craig Neilsen, said net income rose to $17.8 million, or 31 cents a share, from $14.3 million, or 25 cents a share, a year earlier.

The results beat the average analysts' profit estimate of 25 cents a share, as compiled by Reuters Estimates.

Calyon Securities analyst Smedes Rose attributed the upside to better profit margins at Ameristar's Kansas City, Missouri casino.

"It looks like the trends are a little bit better than we expected," he said.

The company's shares, which rose 3.15 percent to close at $31.48 on Nasdaq, rose 3.1 percent to $32.47 in after-hours trading.

Gordon Kanofsky, Ameristar's co-chairman and co-manager of the trust held by Neilsen's estate, said there are "no plans to sell Ameristar shares in the near or intermediate term," although the bulk of the holdings will eventually be turned over to a foundation devoted to spinal-cord injury research.

Craig Neilsen died in November.

Chief Executive John Boushy said Ameristar aims to double its size over the next three to five years, with half of the growth coming from existing properties and the other half through acquisitions.

He also said budgets to expand two existing properties -- one in St. Charles, Missouri and its Black Hawk casino outside Denver -- have increased by a combined $65 million and further cost increases and construction delays are possible.

Ameristar said net revenue edged up slightly to $244.1 million from $243.8 million in the year-ago quarter, while promotional allowances fell 16 percent to $43.7 million.

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 6.4 percent to $66.1 million.

EBITDA in Kansas City rose 16 percent to $17.7 million, while Black Hawk EBITDA totaled $5.2 million, compared with $698,000 a year earlier, when construction work disrupted operations.

Ameristar estimated first-quarter 2007 operating income of $44 million to $46 million, EBITDA of $68 million to $70 million and earnings of 34 cents to 36 cents a share.

For the full year, the company estimated operating income of $176 million to $184 million, EBITDA of $272 million to $280 million and earnings per share of $1.41 to $1.49.

Analysts had projected a first-quarter net profit of 37 cents a share and full-year income of $1.37 per share.