International Game quarterly profit falls 19 pct - Tuesday 12th of July 2005

Slot machine maker International Game Technology (IGT.N: Quote, Profile, Research) on Thursday said its quarterly profit fell 19 percent from continued weakness in U.S. casino demand and earnings in the coming fiscal year will fall short of estimates.

IGT shares fell $1.79, or 6.2 percent, to close at $27.21 on the New York Stock Exchange.

Net income in its fiscal third quarter ended June 30 slipped to $114.7 million, or 32 cents a share, from $141.1 million, or 38 cents a share, a year earlier.

In recent years, casinos have switched from coin-based slots to machines that issue paper tickets and International Game is waiting for the next phase of replacement orders to kick in and for gambling to be approved in new jurisidictions.

"It was a ho-hum quarter," said Aimee Marcel, an analyst at Jefferies & Co. Without a $10 million licensing fee, IGT would have earned 29 cents a share, below the average analyst estimate of 30 cents a share, she said.

Chief Executive T.J. Matthews said near-term challenges will keep quarterly earnings in the range of 30 cents per quarter through fiscal 2006, or $1.20 per share for the year, but said long-term trends in slot machine demand remain positive.

Analysts expected a profit of $1.43 a share for the fiscal year ending September 2006, according to Reuters Estimates.

IGT remains in a period of lower earnings given a tough macro environment, but positive developments in California or Florida, timely roll-outs in New York and Pennsylvania, or strong Japanese sales, could represent upside to estimates, Deutsche Bank analyst Marc Falcone said in a report.

Marcel called the $1.20 target "conservative," noting IGT said it did not include share buybacks and any potential upside from new slot machine operations in states such as Pennsylvania and Florida.

The 2006 outlook also does not include charges of 7 cents to 8 cents a share for stock options, the Reno, Nevada-based company said.

In the latest quarter, product sales fell due to lower North American replacement demand, but higher prices and increased profit from domestic sales of systems and other non-machine products helped boost per-unit revenue, said Chief Financial Officer Maureen Mullarkey.

Quarterly revenue fell 6.4 percent to $579.56 million from $618.89 million. North America product sales were down 25 percent to $182.6 million, while international product sales rose 27 percent to $91.9 million.

Matthews said the continued acceptance of gaming as entertainment -- evidenced by more liberal gambling legislation in states like New York and Pennsylvania and countries including Singapore and Britain -- bodes well for IGT in the longer term.

The CEO said the next big innovation in slot machines -- games that are downloaded from a central server -- will begin to augment the companys earnings in fiscal 2008.

Other news from around the same time

Raids Net Nearly 60 Video Gambling Machines - Tuesday 12th of July 2005

The South Carolina State Law Enforcement Division said Thursday that it seized nearly 60 illegal vid....


Shootout Begins Outside Casino, Continues During Pursuit - Tuesday 12th of July 2005

Authorities said the pursuit began when the motorist attempted to force a woman off the freeway in P....


International Game Q3 Profit Sinks - Tuesday 12th of July 2005

International Game Technology, the No. 1 manufacturer of slot machines, on Thursday said third-quart....


Online bookmaker claims US winning ticket - Tuesday 12th of July 2005

Trident Gaming, the privately-owned betting group, today announced the acquisition of Gamebookers, t....


Casino future hits stalemate - Tuesday 12th of July 2005

It now looks likely that the island may have to wait until next year for the States to decide if it ....


Port, ships OK sewage pact - Tuesday 12th of July 2005

Under an agreement with the Canaveral Port Authority, Port Canaverals two gambling ships will disch....


Tables turn against London Clubs - Tuesday 12th of July 2005

WHILE the hoi polloi do their credit cards on blackjack and the virtual roulette wheels of cyberspac....


The city administration has reiterated its calls for the American and Australian embassies to remove protective barriers erected outside their premises that are blocking traffic in South and Central J - Tuesday 12th of July 2005

British Columbia is adequately managing the risks associated with the provinces growing gaming busin....


Embassies pressed to remove barriers - Tuesday 12th of July 2005

The city administration has reiterated its calls for the American and Australian embassies to remove....


Empire Online already worth $1 billion - Tuesday 12th of July 2005

Is online gambling company Empire Online Ltd. (AIM:EOL) about to make an acquisition? A company anno....