Faced with what was described as a challenging quarter, International Game Technology (IGT) saw its third quarter earnings remain essentially flat while having its revenue move slightly higher.
Reporting on the third quarter of the company’s fiscal year that ended on June 30, TJ Matthews noted that "despite flat machine shipments," the company saw record revenues in its gaming operations and improved product sales.
Yet, traders saw value in the report and by Monday afternoon at the close of trading had lifted the price of a share to $38.71.
Total revenues for the reporting period amounted to $612.4 million, an increase of 6% over the corresponding period of 2005, and diluted earnings per share of $0.33. The consensus of analysts was for $0.31 per share.
During the quarter, the company shipped about 23,500 gaming machines, slightly less than the previous year in the third quarter, however this was offset by the demand for premium machines that helped unit price jump from $11,400 to $12,600.
Also helping the quarter was a 20% increase of product sales in the international division. And making an impact, as well, was the increase of 1,800 participation machines that boosted the company’s total to some 46,200 units, or 7,700 machines more than a year ago.
Matthews described the quarter by saying:
"The ability to post meaningful financial improvements in a market with limited new or expansion opportunities is a testament to the diversity and depth of IGT’s business and product offerings."
Investors seemed to agree. The report was followed by a pair of upgrades from analysts.
Having guaranteed Pinnacle Entertainment Inc. (PNK) a sizable termination fee if it failed to agree to its buyout offer, Aztar Corporation (AZR) ended up reaching down deep for $78 million when it accepted the $54 per share competing offer from Columbia Sussex.
That payment caused the company to report a net loss of $66.1 million for the second fiscal quarter, or on a per share basis, a loss of $1.84. This compared with the $0.41 net income reported in the second quarter of 2005.
Actually, after adjusting for stock operation compensation expenses, the diluted net income per share was $0.35. Yet, second quarter revenue was $221.9 million compared to last year’s $221.4 million.
On average, analysts had been expecting earnings of $0.43 per share.
As for the current quarter, the company said it expected to a post a loss of about $5 million in revenue and $3.5 million in operating profit because of a temporary work stoppage in New Jersey earlier this month due to a government budget impasse that kept state inspectors off the job.