IGT narrows loss in fourth quarter but misses analysts’ estimates
Gaming equipment and slot-machine manufacturer IGT narrowed losses with cost reductions and favorable foreign currency gains in 2018 but still missed analysts’ fourth-quarter earnings estimates, the company reported Thursday.
The London-based company with Reno roots and a large Nevada presence reported a loss of $102 million, or 50 cents a share, for the quarter that ended Dec. 31. That compared with net income of $79.7 million, 39 cents a share, for the same quarter a year earlier.
While revenue in 2018 was off by 2 percent to $4.831 billion, the company narrowed its losses from $5.26 a share in 2017 to 10 cents a share in 2018.
Revenue fell 5.9 percent to $1.266 billion, mostly attributed to the company’s sale of its DoubleDown Interactive social gaming business to DoubleU of South Korea as well as generally weaker international gaming services revenue.
Higher taxes and the upfront payment of a lottery license in Italy affected international business, but the company said product sales revenue was up 11 percent to $126 million in North America as a result of a 27 percent increase in slot-machine units shipped and higher average selling prices.
“Our 2018 results are in line with the improved outlook we provided in October,” IGT CEO Marco Sala said in a news release. “The year was characterized by strong global lottery performance, resilience in Italy and progress in North American gaming.
“We’ve established solid foundations to build on, securing large, long-term lottery contracts in key markets and executing a full refresh of our gaming machine cabinet and content portfolio. These efforts will translate into improved free cash flow beginning in 2019.”
IGT barely fell short of revenue and net income projections from Wall Street analysts that on average had forecast revenue of $1.27 billion.
The company also declared a dividend of 20 cents per share payable April 4 to shareholders of record on March 21.
In a conference call with investors on Thursday, Sala said IGT is carefully monitoring the U.S. Department of Justice’s reinterpretation of the 1961 Wire Act and lawsuits filed against the department to determine if it could have a negative impact on the company’s lottery ticket sales in the United States.
“We are awaiting the opinion and monitoring the lawsuits and industry response to it and also engaging with customers and other members of the industry to understand the potential impact on our businesses and determine the best course of action,” Sala said.
IGT stock got thumped on Wall Street Thursday, closing down $2.72, 15.9 percent to $14.35 a share on volume more than six times the average daily volume. After hours, the issue recovered by 7 cents, 0.5 percent, to $14.42 a share.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.