BUSINESS

IGT net income rises 50% on machine sales; Scientific Games loses $27m in Q3

TAGs: double down casino, IGT, international game technology, Scientific Games

igt-scientific-gamesGaming device maker and online gaming outfit International Game Technology (IGT) saw net income rise 50% to $90.1m in its fiscal Q4 ending Sept. 30, 2012. Revenues rose 17% to $631m, representing IGT’s highest quarterly revenue tally in four years. North American machine sales revenue rose 52% to $153m, the highest quarterly figure in eight years, boosted by a 67% rise in replacement unit sales. Operating expenses for the quarter rose 44% to $261.2m, largely on expenses related to IGT’s interactive operations, including $15m stemming from the closure of poker network Entraction. However, the company realized $45m in tax benefits from shuttering Entraction, so, um… yay?

IGT’s interactive operations contributed revenue totaling $53.9m – $35.8m from social game offshoot Double Down Casino and $18.1m from IGTi, which encompasses the online real-money operations (at least, what’s left of them until Nevada online poker becomes a reality). Double Down’s revenues were up 20% on a sequential quarterly basis, while daily active users (DAU) rose 4% to 1.4m and the average bookings per DAU rose 8% to $0.28. On a post-earnings call with analysts, CEO Patti Hart said the movement of “proven products” from the IGT game library into Double Down has had “a significantly positive impact” on monetization. Moreover, Hart said IGT was able to move these products into Double Down “in about half the time and with about half the costs” incurred by their social gaming competition.

For IGT’s fiscal year, total revenues rose 10% to $2.15b, thanks to a 23% boost in new and replacement gaming device shipments for a total of 44,200 units. Thanks to the Double Down acquisition, IGT’s FY interactive operations rose 293% to $144m. Adjusted earnings per share rose 12% to $1.04, the third consecutive year of double-digit growth in this category, but earnings per share from continuing operations fell 11% to $0.86.

Lottery tech provider Scientific Games Corp. reported a $27.1m loss in Q3 2012, despite revenues rising 2.1% to $227.5m. Attributable EBITDA rose nearly 1% to $82.5m but operating income fell 38.2% to $13.2m. The good news is that the company’s US instant ticket and lottery systems customer retail sales rose 8.9% and 8.5% respectively, while UK gaming machine subsidiary Global Draw reported total gross win and gross win per terminal up 8.1% and 6.5% respectively. Dragging things down were softening instant ticket sales in Italy and China, and the company also recorded a $5m loss on currency exchange fluctuations (that will teach you to hold on to those drachmas). Broken down by division, printed products saw revenues fall 1.8% to $127.4m, lottery systems revenue rose 3.8% to $61.9m while gaming revenue rose 14.2% to $38.3m thanks largely to the April 2011 acquisition of machine manufacturer Barcrest, which added $6.7m in service and sales revenue to this quarter’s tally.

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