IGT Profit Tops Analysts’ Estimates as Social-Games SoarChristopher Palmeri
International Game Technology, the world’s largest slot-machine maker, posted a 26 percent increase in second-quarter profit, exceeding analysts’ estimates as orders picked up and social-gaming revenue grew.
Net income rose to $78.2 million, or 29 cents a share, from $61.9 million, or 21 cents, a year earlier, the Las Vegas-based company said yesterday in a statement. Excluding items, profit of 36 cents beat the 30-cent average of 17 analysts’ estimates compiled by Bloomberg.
IGT benefited as Canadian casinos began replacing machines after as much as seven years, Chief Financial Officer John Vandemore said in a telephone interview. Sales of replacement slots in North America climbed 68 percent to 8,400, the company said. New slots, such as a Dolly Parton game that lets players choose songs while gambling, also boosted results, he said.
“We had some really excellent games hitting the floor,” Vandemore said. “On interactive, we couldn’t ask for better results.”
Sales increased 11 percent to $600 million in the quarter ended March 31, the company said, exceeding analysts’ estimates for $572.5 million.
IGT rose as much as 5.7 percent to $18.28 in extended trading after results were announced. The stock gained 3.5 percent to $17.30 at the close yesterday in New York and has advanced 22 percent this year, compared with an 11 percent rise for the Standard & Poor’s 500 stock index.
IGT’s interactive unit, which includes slot machine-style games on Facebook.com, as well as real online wagering outside the U.S., increased revenue 94 percent to $66.7 million.
The company has begun taking real online bets in Mexico and Canada, Chief Executive Officer Patti Hart said in an interview. IGT is also talking to New Jersey casino operators about offering its online betting technology there. Hart said she doesn’t expect to offer online gambling in Nevada because current law only permits poker, not IGT’s strength.
The company’s online wagering revenue, a subset of interactive, fell 4.6 percent to $12.4 million after the company quit some unprofitable markets in Europe in the past year. Excluding those, revenue climbed 7 percent, Vandemore said.
IGT’s biggest business, sales of slot machines, grew 16 percent to $279 million, the company said.
Revenue from gaming operations, where IGT operates networks of machines at casinos, fell 4.4 percent to $254.3 million, reflecting less play at machines in the U.S., Vandemore said.
The company fought a proxy battle earlier this year led by New York money manager Jason Ader, who proposed three nominees to the board. Daniel Silvers, who works for Ader Investment Management, was the only one elected.
Hart said she had received e-mails congratulating her on the company’s earnings yesterday, including some from people critical during the proxy battle.
“People move to the side of the table where the winners are in this world,” she said.