IGT looks East for new biz

Jan 29, 2002 9:18 AM

Prospering in sluggish times, IGT machine sales climbed last quarter and the game maker expects to crack new markets in the next two years.

“We are poised for market expansion in New York, Pennsylvania and Kentucky,’’ said Maureen Mullarkey, senior vice president and chief financial officer. The Empire State recently requested proposals for a central pari-mutuel style system of some 20,000 terminals. Pennsylvania and Kentucky are also preparing to order statewide systems employing 8,000 to 10,000 games apiece.

And IGT sees more on the horizon. “There are at least 20 states with budget gaps, and they’re looking at a variety of ways to increase their revenue sources,’’ Mullarkey said.

With a 70 percent market share ”” and growing ”” the Reno-based gamer sharpened its competitive edge with the acquisition of Anchor Gaming late last year. Analysts predict that Anchor’s creative genius will help IGT cash in on state lotteries, whose revenues have stalled from a lack of new games. “They have the creativity to boost action,’’ said one industry insider.

Posting its sixth straight profitable quarter, IGT reported net income of $51.8 million or 70 cents per diluted share on total revenues and earnings of unconsolidated affiliates of $335.4 million. That was up from $48.2 million or 64 cents a year ago. Operating income for the quarter just ended was $97.8 million, up 10 percent.

On that news, Deutsch Bank jumped on the bandwagon, upping its recommendation from a “buy” to a “strong buy’’ within hours of IGT’s call.

But IGT’s strong showing came despite soft numbers from Nevada ”” where shipments fell 1,100 ”” and Harrah’s decision to pull some of the company’s participation games from its casinos.

IGT Chairman Chuck Mathewson didn’t take Harrah’s move personally. “We’re great friends and good partners,’’ he said.