International Game Profit Surges on Slots Sales, Online
International Game Technology (IGT), the world’s largest maker of slot machines, reported a 41 percent increase in third-quarter profit as casinos stepped up purchases and the company increased online revenue from casino-like games.
Profit excluding some items totaled 33 cents a share, beating the 31-cent average of 16 analysts’ estimate compiled by Bloomberg. Sales rose 8.7 percent to $579 million from a year earlier, according to a statement today from Las Vegas-based International Game. That missed estimates of $582.9 million.
Slot-machine sales increased 12 percent to $259.2 million, spurred by deals in Canada, and interactive revenue jumped 69 percent $72.5 million, the company said. The weak division was gaming operations, which runs networks of machines such as “Wheel of Fortune” on behalf of casino partners. Revenue at the unit fell 4 percent to $247.3 million.
“It’s the one that feels the brunt of consumer descretionary challenges the most,” Chief Financial Officer John Vandemore said in a telephone interview. “People aren’t spending as much as they used to on gaming-related activities.”
Net income rose to $65.7 million, or 25 cents a share, from $46.6 million, or 16 cents, a year earlier. The results underscore the wisdom of the company’s expansion into online gambling, Chief Executive Officer Patti Hart said on a conference call. The Las Vegas-based company paid as much as $500 million last year for Double Down Interactive, a maker of social casino games for Facebook Inc. Customers can buy chips on the site but can’t win actual money.
Daily active users at Double Down jumped 25 percent to 1.7 million in the quarter, from a year earlier, while revenue per user rose 60 percent to 40 cents per day.
Mobile customers jumped 41 percent sequentially, Vandemore said. Revenue per customer on iPads and other wireless devices were similar to that of desktop computers.
“That’s good,” Vandemore said. “A lot of mobile applications are monetized at a lower clip.”
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