Shuffle Master falls as 1Q results miss estimates

Mar 13, 2009 9:56 PM
Staff & Wire Reports |

Shares of Shuffle Master Inc. dropped Friday after the gaming equipment supplier's first-quarter results missed Wall Street's expectations.

Late Thursday, Shuffle Master (SHFL) said it lost 2 cents per share during the quarter, which included a 3 cent-per-share severance charge due to the departure of two senior executives. Stripping out one-time items, the company earned 1 cent per share in the quarter, below Wall Street's target of 4 cents per share.

Its quarterly revenue was also shy of analysts' forecast. It fell 9 percent to $34.5 million, while analysts surveyed by Thomson Reuters expected higher revenue of $42.7 million.

The Las Vegas-based company's stock shed 48 cents, or 18.7 percent, to $2.09 in morning trading. The shares have traded in a 52-week range of $1.98 to $8.38, and are off 48 percent since the start of the year.

"While the company's leasing business continues to improve, weak near-term sales continue to drag down earnings," Todd Eilers of Roth Capital Partners LLC wrote in a client note.

Eilers lowered his 2009 and 2010 earnings per share estimates to 20 cents and 28 cents from 28 cents and 34 cents, respectively.

The reduced forecasts led Eilers to cut Shuffle Master's price target to $2.25 from $4.25. He maintained a "Hold" rating.

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JPMorgan's Joseph Greff said Shuffle Master missed his forecast for earnings of 6 cents per share, with revenue off $5.8 million from his $40.3 million estimate.

Like Eilers, Greff reduced his 2009 profit forecast to 23 cents per share from 33 cents per share and trimmed his 2010 estimate to 27 cents per share from 39 cents per share, citing the stronger dollar and difficult economic conditions.

He reaffirmed a "Neutral" rating.