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Bally Technologies beats Q1 estimates

May 20, 2008 7:00 PM

Earnings by Ray Poirier | After hearing so many gaming companies report earnings declines or outright losses, investors reacted positively last week when Bally Technologies Inc. (BYI) reported record revenues and record income.

Languishing in the mid-$30 range for a few weeks, BYI shares jumped to the low $40 level following the earnings announcement.

Analysts also noted that the net income of $30.2 million or $0.52 per share was $0.04 better than the consensus estimate. Revenue rose to $232.6 million from last year’s $175.2 million.

Providing more encouragement was Bally Technologies’ guidance that earnings for the entire year should rise to somewhere between $1.93 and $2.05 per share. Revenues for fiscal 2008 are expected to be $885 million.

Melco PBL Entertainment

With positive comments coming out of Macau, where Melco PBL Entertainment (MPEL) operates a major casino resort, it was not unexpected to learn that the company had reversed a downward trend and reported a gross profit for the first quarter of 2008.

The company reported revenues of $12.1 million, compared to last year’s $8.9 million, and gross profit of $3.8 million. The revenue increase, said the company, resulted from increased business at the Macau casino.

Net loss for the period, however, was $412,000 or $0.05 per share compared to a net loss of $1.5 million or $0.18 per share in 2007.

Looking to reduce its operating costs, the company said it was moving its Las Vegas-based chip manufacturing facility to Mexico.

Scientific Games

Although first quarter earnings were below last year, and analysts estimates, shares of Scientific Games Corp. (SGMS) climbed steadily last week, primarily because of expectations from a recent contract with a company in China.

Earnings for the period ending on March 31 fell 20% to $19.9 million or $0.21 per share, down from $24.8 million and $0.26 per share a year ago.

Operating revenue increased 6% to $257 million from last year’s $242.3 million.

In clients’ notes, two analysts based their optimism for the company from its recent contract signing with a Chinese lottery ticket provider.

Steven Wieczinski of Stifle Nicolaus & Co. said he anticipated the company’s stock would get a lift from its improved product margins and its expansion in China while Robert Evans of Craig-Hallum Capital said he expects an even better performance in the second quarter because of growth in Italy and China.

WMS Industries

Surprising many gaming company watchers, considering two other major machine manufacturers had reported declining sales, WMS Industries Inc. (WMS) said its third quarter profit climbed 46%.

Quarterly earnings, the company said, rose to $0.32 per share, beating by two cents per share the $0.30 forecast from the majority of analysts.

Also, guiding for the remainder of the year, the company said it expected revenue to range between $640 million and $645 million, up from its previous prediction of $620 million to $632 million.

Steven Kent, gaming analyst at Goldman Sachs, said he liked the company’s international efforts and approved of its decision to name CEO Brian Gamache to the additional role of chairman to succeed the retiring Louis Nicastro.

Other Q1 reports

Progressive Gaming International Corp. (PGIC) showed a quarterly loss that narrowed to $8.4 million or $0.15 per share compared to a loss of $8.7 million or 0.25 per share last year. The company had about 62 million shares outstanding in the latest quarter compared with 34.8 million shares in the comparable quarter.

Gaming Partners International Corporation (GPIC) said its revenues increased from $8.9 million for the first quarter of 2007 to $12.1 million in 2008. Net loss for the period was $412,000 or $0.05 per share compared to last year’s net loss of $1.5 million or $0.18 per share.

Trump Entertainment Resorts Inc. (TRMP) reported a net loss of $18.6 million or $0.59 per share, more than double the $8.1 million or $0.26 per share loss incurred in the first quarter of 2007.

Ameristar Casinos Inc. (ASCA) took a hefty impairment charge during the first quarter that resulted in a loss of $60.9 million or $1.07 per share compared with a profit of $24 million or $0.41 per share a year earlier. The impairment charge was for $129.1 million and it related to lower expectations for its East Chicago, Indiana, acquisition.

Churchill Downs Inc. (CHDN) said a big insurance gain of $17.2 million helped it report a profit of $742,000 or $0.05 per share for the first quarter. In the previous year, the company reported a loss of $8.2 million or $0.61 per share.

MTR Gaming Group Inc. (MNTG) reported a first quarter loss of $2.6 million or $0.10 per share compared to a profit of $559,000 or $0.02 a share the previous year. The company blamed the loss on debt restructuring and strategic development expenses.

Cash Systems Inc. (CKNN) reported a net loss of $4.6 million or $0.25 per share compared to last year’s net loss of $1.4 million or $0.08 per share.

Canterbury Park Holding Corp. (ECP) reported net income of $498,880 or $0.12 per share for the quarter compared to net income of $892,377 or $0.21 per share in 2007.