The ability of International Game Technology (IGT) to escape Wall Street’s pitiful performance perception was short lived last week even though the company was able to beat the consensus number with its earnings for the second fiscal quarter.
The company said the March 31 quarter had produced earnings of $124 million or $0.35 per share compared to last year’s $93.9 million or $0.26 per share. Analysts’ consensus was for per share earnings of $0.31.
Sales during the period jumped a surprising 17% to a record $644.4 million.
Following the Thursday announcement, the price of IGT shares rose to $38.14, more than 9% higher than the previous day’s trading level. But that share level could not be sustained. During Friday trading, IGT shares fell $1.21 to $36.93 with 4.6 million shares changing hands.
Prior to the company’s announcement of a solid quarter, most analysts had taken the position that IGT, and other slot machine manufacturers, would remain in a difficult position until new jurisdictions opened up around the country. However, IGT was able to overcome the problem.
"We achieved a number of financial records in the second quarter," said TJ Matthews, chairman and CEO, "despite limited visibility into new unit growth in the domestic market. He added that the company had shown "solid results" in the growing international market.
On the locals front, the openings of the South Coast, owned by Boyd Gaming Corp. (BYD), and Red Rock Casino, owned by Station Casinos Inc. (STN), helped boost earnings since IGT provided most of the machines for those two properties.
Also helping to boost revenues was an increase of 6,500 recurring revenue machines, raising that total to 44,400 units.
International improvements were noted in Japan, the United Kingdom, all of Europe, Latin America and Australia, the company said.