ISLE’s quarter, fiscal year earnings rise

Jun 27, 2006 4:40 AM

In a sluggish market Friday, Isle of Capri Casinos Inc. (ISLE) caught the eye of investors early on with a solid fourth-quarter earnings report that sent the company’s share price zooming more than $2.00 per share.

Income during the period increased fourfold from last year’s $3.5 million to $15.1 million with earnings per share moving upward from $0.11 per share to a sparkling $0.48 per share.

For the full year, the company said its net income was $19 million or $0.61 per share, up from last year’s $18 million or $0.58 per share. Revenue reached $988 million, a 4.3% jump over $947.6 million registered in 2005.

The report was followed by an analyst evaluation from Ryan Worst of Brean Murray who said he was upgrading the stock to "accumulate" from "hold" based on improved margins and higher revenue.

"Stronger than expected results in Mississippi and better than expected margins in Iowa and an attractive valuation should provide upside for the share," Worst wrote in a note to clients.

Worst also noted that the company had projects planned for both Pittsburgh, Pa., and on the Gulf Coast that would give the stock further momentum.

However, by the close of trading on Friday, ISLE was up only $0.49 per share for a trading price of $24.91.

GTECH Holdings

Both revenue and net income declined during the first quarter of business for GTECH Holdings Corporation (GTK) that ended on May 27.

Revenues for the period were $315.8 million compared to $326.3 million reported in the first quarter of fiscal 2006. Diluted earnings per share amounted to $0.35 compared to last year’s $0.43.

The company is in the process of merging with the Italian company Lotomatica. It’s expected that the merger will be completed sometime this summer with shareholders being given $35 for each share they hold. After the merger, GTECH, the country’s leading provider of lottery equipment and services, will operate as a wholly-owned subsidiary of Lottomatica.

In reviewing the quarter, Bruce Turner, president and CEO of GTECH, said he was "pleased with the performance of the business, despite the difficult quarter-over-quarter comparisons created by nonrecurring events in both periods."

Progressive Gaming

A drop in revenue, described by the company as caused by the timing of regulatory approvals for new products, sent Progressive Gaming International Corp. (PGIC) back into the red for the first quarter of the current fiscal year.

Revenue for the period dropped to $16.9 million from last year’s $22.9 million. This resulted in a loss of $8.8 million or $0.26 per share compared to a profit last year of $957,000 or $0.04 per share.

Adding to the loss was the inclusion of stock-based compensation and other shares of $5.5 million or $0.16 per share.

Following the announcement, shares of PGIC plunged $0.88 to $7.75 per share. By the close of trading on Friday, share price had declined a bit more to $7.69 per share.

Analysts had expected the company to have a break even quarter with $21.1 million in sales. Still, the company said total 2006 revenues should top $75million with the potential for another $18 million depending on the success of new strategic initiatives.