Slot machine maker International Game Technology Plc (IGT) is likely to report above-consensus earnings in the second quarter, says a note from Deutsche Bank Securities Inc.
IGT had seen a 17-percent decline in its share price since its first-quarter earnings filing in May, noted the brokerage. The fall was not related to those results, said a Wednesday memo from Carlo Santarelli at Deutsche Bank. IGT had reported operating income up 65 percent from the prior-year period.
But investors were made nervous by other factors following on from the first-quarter numbers, including unfavourable foreign exchange movements – IGT makes much of its money in euros but reports its results in U.S. dollars; a share transaction involving its controlling stockholder; and concerns around the political and regulatory environment in Italy, where IGT has a significant gaming terminal business.
The second-quarter numbers “should ease concerns around guidance cuts related to fundamentals,” said Mr Santarelli, adding that current pricing of the stock offered an inexpensive entry point for investors.
“We expect IGT to highlight its strong out-year free cash flow, potential for capital returns, and the stability of its lottery business, given few larger-scale, near-term renewals, at its upcoming analyst day in New York on August 2,” he added.
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