GGRAsia – IGT CEO flags ‘more moderate’ outlook for 1Q earnings

IGT CEO flags ‘more moderate’ outlook for 1Q earnings

Apr 10, 2024 Newsdesk Industry Talk, Latest News, World

The chief executive of International Game Techology Plc (IGT), which plans to spin off its land-based and digital gaming business and merge it with Everi Holdings Inc in a US$2.6-billion transaction, has said the company is committed “to balancing our 2023 full-year results with more moderate expectations for the first quarter of 2024”. His comments were made in a message to employees about the merger deal with Everi.

Vince Sadusky acknowledged that after the news and IGT’s 2023 earnings report, the group’s “stock trended down”.

But he said “market reaction can sometimes favour short-terms results versus longer-term impacts,” adding “we have a lot of work to do before closing” the deal with Everi.

That is due “in late 2024 or early 2025,” according to a February announcement.

IGT had mentioned at the time of its fourth-quarter results, that the group achieved “record” adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) in 2023, at nearly US$1.78 billion, up 6.9 percent from the prior year.

Mr Sadusky added in his recent update to workers: “We are all excited to see how the market reacts later in the year, as we progress toward closing our transaction, and move closer to realising the benefits of separating our businesses.”

That was a reference to the fact the the global gaming and PlayDigital units of IGT would tie with Everi under an ‘IGT Inc’ stock ticker, while the lottery business of IGT would have a separate designation, under a separate stock ticker.

“The timeline for closing [the deal] is driven by a variety of factors, including approval by IGT and Everi shareholders, and receipt of the required regulatory approvals,” stated Mr Sadusky.

He added: “We must secure antitrust approval in the U.S., along with the approval of several financial regulatory bodies. We must also work with gaming regulators responsible for more than 400 licences we maintain around the world.”

The IGT CEO said his letter was the first of what would be “a series of periodic updates” to the close of the transaction.

He added: “The goal is to keep you informed about significant milestones in our process because we understand the importance of regular communication at a time of significant organisational change.”

Last month, Mr Sadusky told investment analysts that the deal would provide “compelling revenue synergies across products and geographies”.

Last week, David Bain, an analyst at brokerage B.Riley Securities Inc, said the tie-up could be a “modernisation catapult” for the casino sector.