IGT Net Income Down 67 Percent as Slot Sales Decline
LAS VEGAS (Associated Press) — Gambling equipment manufacturer International Game Technology said its net income fell 67 percent as sales of slot machines declined and the company faced competition from smaller vendors.
Shares fell $1.45, or 10 percent, to $12.62 Wednesday.
The Las Vegas-based maker of slot machines and online gaming systems has suffered from an overall decline in U.S. gambling revenue. Its international business has been hurt by declines in the value of foreign currencies and other problems. In response, IGT announced last month that it would cut 7 percent of its jobs, or about 350 positions, in a move that is expected to save $30 million this fiscal year and $50 million in subsequent years.
The company’s interactive gaming sector, which includes the DoubleDown casino game apps available on Facebook, was the only one to show growth. Social gambling revenues rose 27 percent to $68.8 million in the second quarter, the company reported Tuesday, driven by more daily active users and players spending more on virtual tokens to use on the site. The DoubleDown casino attracts more than 6 million players each month.
Overall, revenue dropped 15 percent in the January-March quarter, to $512.8 million from $600 million in the same time last year. Wall Street anticipated $498.8 million in the most recent quarter, according to FactSet.
IGT’s profit came to $25.7 million, or 10 cents per share, down from $78.2 million, or 29 cents per share, in the same quarter last year.
The company’s adjusted earnings per share fell 44 percent to 20 cents, beating analysts’ expectations by a penny. The adjusted earnings figure excluded charges related to acquiring DoubleDown, the company’s restructuring and other special items.
