IGT sets records
in all categories

Jul 24, 2007 5:15 AM

In every measurement category, International Game Technology (IGT) set records during the third fiscal quarter that ended on June 30.

The report on Thursday launched the earnings season for the major gaming companies.

Net income for IGT’s third quarter reached $136.4 million or $0.41 per share compared to last year’s $114.1 million or $0.33 per share. Most analysts had expected the company to earn between $0.36 and $0.39 per share.

For the nine months of the 2007 fiscal year, the company had net income of $385.6 million or $l.14 per share, easily topping last year’s $358.8 million and $1.02 per share.

Highlighted by the company were the following performances:

Record revenues and gross profit, up 15% and 19%, respectively from the prior year;

Record product sales up 23% to $364.6 million;

Record gaming operations revenues up 9% to $341.9 million;

Record gaming operations installed base of 58,200 machines;

Record operating income up 26% to $216.3 million;

Record adjusted EBITDA or earnings before interest, taxes, depreciation and amortization, and

Record year-to-date cash flow from operations of $564.9 million, an increase of 48%.

The company noted that it has repurchased 6.4 million of its outstanding shares at a cost of $248.8 million.

In reviewing the company’s experience, TJ Matthews, chairman and CEO, remarked that in addition to the record performance, the company also made strategic investments. These included investment in China LotSynergy Holdings and Digideal Corporation, as well as working a five-year deal of cooperation with Casino Club of Argentina.

Despite the uplifting report, gaming analysts took a mixed view of the company’s future.

Analysts at Morgan Joseph downgraded the shares prior to Friday’s opening while others, such as Joe Greff of Bear Stearns suggested in a client’s note that a decline in the share’s trading price could offer a buying opportunity.

Matthews in providing an earnings outlook for the final 2007 quarter that ends on Sept. 30 said he expects earnings of $0.35 to $0.40 per share while Wall Street consensus was for $0.40 per share.