IGT posts Q3-2014 fiscal results

The American gambling supply and content provider International Game Technology, recently the subject of a GTech acquisition agreement (see previous reports) has posted a mediocre set of Q3-2014 fiscal results showing:

* Year-on-year total group revenue down 19 percent to $468 million;

* Operating income down 11 percent at $109.6 million, but net income up 10 percent at $72.1 million;

* GAAP earnings per share up 16 percent to $0.29

* Adjusted EPS down 15 percent to $0.28

The company said that the drop in revenues was due to lagging sales and gaming operations.

“July saw the culmination of our process to evaluate strategic alternatives for IGT and our shareholders,” said Patti Hart, IGT CEO.

“We successfully balanced this effort during the third quarter with our focus on continuous improvement in our business evidenced by expanded gross margins and expected EPS performance. Our effective cost management has improved efficiencies in a challenging industry environment and has positioned us for future market opportunities.”

The online activities of the company, especially in the social gaming sphere, proved to be among the more successful performers in the group.

* Social gaming revenue over the quarter increased 17 percent to $72 million and average bookings per daily active user grew 7 percent to $0.43;

* Social gaming revenue increased 31 percent to $205 million in the first nine months, driven by increases in average DAU and average bookings per DAU.

* Average DAU AT DoubleDown Casino was 1.8 million, an increase of 8 percent over the prior year quarter.

* Average MAU were 6 million, a decrease of 10 percent primarily due to increased focus on improving player conversion rates.

* IGTi delivered $11.3 million – up 2 percent;

*Gross margin came in at 63 percent, maintaining the same level as in the same quarter last year.

IGT warned that GAAP earnings per share from continuing operations for fiscal 2014 will include acquisition-related expenses, primarily related to DoubleDown, severance costs, business realignment expenses, asset impairment charges, legal accrual charges, merger-related professional fees and certain discrete tax items or benefits, the amount of which is not determinable at this time.

The company says it may also have to recognise other items that are not currently determinable, but may be significant, and for this reason it is presently unable to provide estimates for full-year GAAP earnings per share from continuing operations.

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