GTECH soars on record earnings

Sep 16, 2003 6:13 AM

When former Wall Street analyst Bruce Turner, retired from his post at Smith Barney was enlisted to serve on the board of directors of GTECH Holdings Corporation, the world’s largest provider of lottery equipment and systems, little did he envision the roller-coaster existence he was about to begin.

Shortly after his appointment, the company found itself without leadership since the CEO and COO were forced out because of alleged improprieties both here and abroad. The directors turned to Turner to fill the gap.

Turner, the West Point grad did more than just serve in a temporary capacity. Within a few short months, he turned the company around.

For the past year, he has served as company president and CEO and proudly announced last week that the company had achieved record earnings for the second quarter of the 2004 fiscal year.

"The growth in service revenues, combined with operational efficiencies in our business, enabled us to deliver service margins in excess of 40%, and we generated earnings per share significantly higher than our expectations," he wrote in the company’s report.

Revenues for the quarter totaled $277.2 million, up 25.5% from the comparable $221 million of revenues generated last year. Net income was $48.5 million, or $0.74 per diluted share, an increase of 26.9%. Last year’s income was $38.2 million or $0.66 per diluted share.

During the period when the company was without leadership, the share price fell to the mid to upper teens but in recent months it has grown to the low $40.

For the remainder of the fiscal year, the company projected revenues to grow at the rate of between 7% and 8% with product sales to be in the range of $120 million to $130 million. Based on this outlook, the company said it now expects earnings per share for the entire year to be in the range of $2.65 to $2.75. Last year earnings per share were $2.43.