Lottery and casino equipment supplier Scientific Games Corp reported a net loss of US$86.4 million – equal to US$1.01 per share – in the first quarter of 2015. It said the loss was mostly due to amortisation and depreciation costs.
The US$5.1-billion acquisition of Bally Technologies Inc, completed in November last year, gave the company a boost. Revenue jumped to US$658.7 million in the first three months of 2015 compared to US$388.1 million one year earlier.
“In our first full quarter following our merger with Bally, we made significant progress in our strategies to integrate Bally operations and unify our organisation,” the president and chief executive of Scientific Games, Gavin Isaacs, said in a statement.
He added: “The process of integrating Bally and Scientific Games is ahead of schedule. Having already implemented actions to achieve approximately US$90 million in Bally-related annualised savings through March 31, 2015, we expect to achieve our goal to implement initiatives to generate approximately 80 percent of the anticipated US$235 million of annual cost savings and another US$30 million of WMS-related annual cost savings by the end of 2015.”
Scientific Games acquired slot machine maker WMS Industries Inc for US$1.5 billion in 2013.
Brokerage firm Wells Fargo Securities LLC said the results of Scientific Games were “slightly lower than expectations”. The company reported gaming revenue – including gaming services and product sales – of US$425.8 million, an increase of 160.6 percent, reflecting the inclusion of Bally Technologies’ results in the first quarter earnings.
“We see balanced risk/reward here given generally low medium-term visibility,” analysts Cameron McKnight, Rich Cummings and Tiffany Lee stated in a note. “If Scientific Games can execute on its synergy targets and gaming equipment industry fundamentals remain stable, we see a potential path to US$20/share,” they added.
The price per share of Nasdaq-listed Scientific Games went up 4.93 percent on Thursday, closing at US$13.61
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