IGT narrows net loss, pays down debt, hopes virus goes away


igt-international-game-technology-gaming-resultsGaming technology supplier and lottery operator International Game Technology (IGT) reported another net loss in 2019, although it was a slightly smaller net loss than the year before.

Figures released Tuesday show IGT’s revenue in the final three months of 2019 falling 1.6% year-on-year to $1.25b, and while operating income effectively doubled to $81m, around $102m in unfavorable currency fluctuations meant the company booked a net loss of $167.7m for the quarter.

Full-year revenue totaled $4.79b, down 1.5% from 2018, while operating income also fell 1.5% to $637m while net income dipped 2.5% to $111.7m. However, nearly $131m was owed to non-controlling interests, which left IGT with a net loss of $19m for the year, a slight improvement over the $21.4m loss in 2018.

IGT CEO Marco Sala chose to look on the bright side, saying the company had grown global gaming product sales by more than one-fifth in 2019, thanks to new games and higher unit shipments, while global lottery same-store revenue also improved. Sala noted that IGT had paid $380m of its $7.76b debt, leaving the company in “strong financial condition.” Investors found the word ‘strong’ somewhat subjective, as the stock is currently trading down around 7% on the day.

For the fourth quarter, IGT’s North American Gaming & Interactive segment reported revenue up 9% to $300m as a 13% rise in product sales offset a 6% decline in gaming services revenue. The unit’s operating income was up one-third to $68m on strong terminal, software and system sales.

The North American Lottery unit saw its revenue fall 9% to $279m while operating income slid 30% to $51m due to a paucity of mega-jackpots compared with Q418.

The International segment’s revenue inched up 2% to $226m, with a major Swedish product VLT order leading to significant growth in terminal sales ($77m, +21%). Lottery services were up 5% to $75m, which helped offset a one-fifth decline in gaming services.

In Italy, revenue slipped 3% to $448m due to declines in lottery services ($194m, -4%) and gaming services ($171m, -11%). Operating income was down 4% to $113m as the market’s new machine gaming taxes took their toll.

Looking ahead, IGT expects operating income to come in between $740m-$790m this year, although the company isn’t factoring in any potential impact by the coronavirus, which has established a firm foothold in Italy at present. Italy announced 400 new cases and 27 deaths on Tuesday, bringing the total number of confirmed cases to 2,502 and deaths to 79.