Despite a strong fourth quarter and fiscal year 2005, Shuffle Master Inc. (SHFL) saw its share value decline on Friday following the financial report given the previous day.
The reason for the sharp drop in share price was the company’s guidance for fiscal 2006 that fell below what financial analysts had expected. By the beginning of trading on Friday morning the shares had fallen from $28.03 a share, the price it traded at on Monday, and the offering price of $25.25.
Still the company showed a solid quarterly performance for the period that ended on Oct. 31. Revenues during the quarter increased by 30% to $33.8 while income from operations jumped 28% to $13.7 million.
Per share earnings were $0.24 per share on net income of $8.5 million compared to last year’s $0.18 per share on net income of $6.5 million.
For the year, the company earned $29.5 million or $0.81 per share while in fiscal 2004 earnings were $24.1 million or $0.64 per share.
Looking forward, the company said, earnings were expected to be between $1 and $1.05 per share, excluding items while analysts expected at least $1.04 per share.
Following the report, Joe Greff, gaming analysts for Bear Stearns lowered his rating on SHFL to "peer perform" from "outperform." He also lowered his earnings forecast to $1.02 from $1.05 per share for 2006.
Commenting on the fiscal results for 2005, Mark Yoseloff, chairman and CEO, said, "Fiscal 2005 represented a period of significant strategic accomplishment for Shuffle Master. Our record financial performance in virtually every category was complimented by successful product development, exciting intellectual property additions, strategic alliances, and a vast improvement in global distribution. We have executed on our plan of becoming a true global leader in entertainment and utility products for the table game market and we’ve done so while preserving our balance sheet strength and driving profitability to record levels."