Revenues rise for IGT; CEO hints at strong new year

International Game Technology grew revenues 17 percent in the fourth quarter while the chief executive of the slot machine giant hinted results from the three-month period were the kicking-off point for the next fiscal year.

IGT on Thursday termed 2012 "a solid fiscal year" as the company integrated revenues produced from free-play social gaming into its overall financial structure.

IGT grew net income 65 percent to $88.1 million in the quarter ended Sept. 30 from $53.4 million a year earlier. Earnings per share increased 83 percent to 33 cents per share from 18 cents per share a year earlier.

IGT said the company's overall revenues in the quarter were $631.1 million.

"We continue to effectively manage the distribution of our products to a diverse set of customers and we are well positioned to continue generating even greater revenues and earnings growth in fiscal year 2013," IGT Chief Executive Officer Patti Hart said in a statement.

The company reported net revenue of $2.15 million for all fiscal 2012, a 10 percent increase over fiscal 2011.

Before the company's quarterly earnings, which were announced after the stock markets closed Thursday, Brean Capital gaming analyst Justin Sebastiano said he had a soft outlook toward IGT.

The company, he said, lacks "a killer 'for-sale' " slot machine.

"Given IGT's strong free cash flow and ability to return capital to shareholders through dividend payments and share buybacks, we choose to stay 'hold' rated rather than taking a more negative stance," Sebastiano told investors.

During the quarter, IGT said its revenues from social gaming was $35.8 million, which was a 20 percent increase compared with the third quarter figures.

IGT acquired DoubleDown Casino earlier this year for $500 million, which is one of the largest social gaming operations on Facebook. The casino games are free to play but revenues are produced when players purchase hundreds of thousands of virtual gaming chips, usually for a nominal fee of less than $1.

Lately, IGT has been embedding the DoubleDown Casino application on the websites of the casino operators that use IGT's slot machines.

During the fourth quarter, IGT said daily active users of its social gaming products grew 4 percent to 1.4 million while the number of monthly users grew 28 percent to just less than 5.1 million.

The average user spent 28 cents per day on the DoubleDown site, which was
8 percent higher than the third quarter.

In the fiscal year, IGT said it sold 44,200 slot machines, which was a 23 percent increase over 2011. The company said the average sales price increased 2 percent to $14,500.

In the fourth quarter, IGT sold 8,500 replacement slot machines, an increase of 67 percent.

"Our strong fourth-quarter financial results serve to highlight a very solid fiscal year 2012 for IGT," Hart said. "In the quarter, we leveraged our industry-leading content to increase revenues, ship share, margins and prices in our core North American business."

IGT said it returned $546 million to shareholders in the form of dividends and share repurchases.

Shares of IGT closed at $12.83 on the New York Stock Exchange, down 6 cents or 0.47 percent. In after-hours trading, though, IGT shares rose $1, or 7.79 percent, to reach $13.83 by 6 p.m. PST.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.
Follow @howardstutz on Twitter.