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New venues to benefit IGT

Nov 12, 2002 5:31 AM

   Not only is International Game Technology (IGT), the nation’s premier producer of gaming devices, on course for a record year but last week voters practically assured that next year would be another record year.

   During a teleconference to report on the most recent quarter, ended on Sept. 30, IGT President and CEO Tom Baker said the company earned $0.95 a share, before extraordinary items, which was three cents better than the consensus estimate of gaming analysts.

   Baker credited the “successful integration” of its merger with Anchor Gaming and the “achievement of widespread customer acceptance of the ticket-in ticket-out technology” as reasons for the company’s most recent successes.

   The transition to the coinless slots by major casino operators (MGG announced last week that it will be converting nearly all their gaming machines to the new technology) will be one of the company’s biggest profit generators during the coming year.

   IGT’s domination of the industry with an estimated market share of 70% will also play an important role in the expansion of gaming nationally during the next 12 to 18 months. Gaming machines have been authorized for a half-dozen racetracks in New York State. These are expected to be installed sometime during the spring/summer of 2003. Also, Park Place Entertainment Corp. (PPE) has agreed to build an Indian casino in the Catskills.

   Further impetus for slot machine sales is expected from both Pennsylvania and Maryland where the racetracks have been lobbying for state approval for several years. During the recent elections, the governors-elect of both states have indicated they are strongly in favor of approval slots in order to generate more tax dollars to make for recent deficits.

   Another major slot sale is expected to be made to The Borgata, the first destination resort gaming attraction to be built in Atlantic City in more than a decade.

   Baker said he was very comfortable a 15% rise in the company’s income for next year. This pushed Wall Street estimates to a profit of $3.85 a share compared to the previous estimate of $3.36 a share.

   During the current fiscal year, the company has repurchased 3.6 million shares at an average cost of about $58.80 a share. On Friday, at the close of trading, IGT shares were listed at $75.99.