Alliance shows quarter doubling profits

Oct 17, 2001 2:17 AM

While several gaming companies have forewarned Wall Street that its earnings for the most recent quarter will be substantially below previous expectations, Alliance Gaming Corp. (ALLY) proudly reported a doubling of profits.

Alliance said last week for the quarter ended on Sept. 30, it had experienced net income of $7.5 million or $0.32 a share compared with $3.4 million or $0.16 a share a year earlier.

The report was in line with Wall Street expectations.

In addition, the company “reconfirmed previous guidance of $1.65-$1.70 and EBITDA (earnings before interest, taxes, depreciation and amortization) of $105 million,” said Bill Schmitt, gaming analyst for CIBC World Markets.

“We are raising our fiscal year 2002 estimates slightly to $1.69 from $1.67 to reflect current strong business trends and slight improvement in operating margins versus our prior estimates,” he said.

Alliance said its Bally Gaming and Systems division continued to be the revenue and earnings driver for the company with revenue improving 34.1% to $45.2 million.

Route operations produced revenue of $53.8 million versus $52.9 million last year and came in a bit below analysts’ expectations.

The company also operates a pair of small casinos that generated revenues of $18.2 million and EBITDA of $6.4 million. In light of the events of Sept. 11, analysts viewed these results as very strong.