GGRAsia – IGT’s net income slips 9 pct in fiscal 2014

IGT’s net income slips 9 pct in fiscal 2014

Nov 07, 2014 Newsdesk Industry Talk, Latest News, Top of the deck

U.S.-based slot machine maker International Game Technology (IGT) reported its fourth quarter and fiscal year 2014 results on Thursday.

For the fiscal year ending September 30, the Nasdaq-listed firm said that on a GAAP (generally accepted accounting principles) basis net income fell 9 percent year-on-year to US$247.9 million, from US$272.7 million a year earlier.

Revenue under GAAP in the period fell 12 percent to just under US$2.06 billion, from US$2.34 billion in the year prior.

Earnings per share for the 12 months slipped 4 percent to US$0.99, from US$1.03. However the firm said it returned US$319 million to shareholders in the form of share repurchases and dividends.

In the fourth quarter, on a GAAP basis net income rose 12 percent to US$70.9 million from US$63.5 million in the equivalent period in 2013. That was on revenue for the quarter that actually fell 15 percent year-on-year to US$536.5 million from US$632.3 million in 2013.

IGT said its product sales for the quarter revenue decreased 25 percent to US$234 million on a difficult year-on-year comparison due to lower machine unit volume. It said the prior year quarter benefited from the sale of 1,800 Canadian video lottery terminal (VLT) units, 1,000 additional Illinois VLT units and 4,600 video poker units under a large contract.

The firm added that social gaming revenue for the quarter increased 22 percent to US$75 million and average bookings per daily active user grew 15 percent to US$0.46.

“Our focus on profitability resulted in significant improvements in our gross margins for the year, and in our gross and operating margins for the fourth quarter, in large part due to cost saving actions we took earlier this year,” said Patti Hart, IGT’s chief executive, in a statement accompanying the results.

Investment analyst Carlo Santarelli of Deutsche Bank AG, based in New York, said in a note: “While game operations and interactive revenues and profits were both essentially in line with our forecast, product sales meaningfully beat.”

He added: “That said, upside related largely to international game sales, seemingly from the international install base, and North American non-machine revenue (likely increased conversion kits).”

In July, Italy-based lottery specialist GTech SpA announced it was acquiring IGT for US$6.4 billion, comprised of US$4.7 billion in cash and stock, and the assumption of US$1.7 billion in net debt. The deal is due to be completed in the first half of 2015.