Scientific Games, a major slot machine and lottery company, reported its third quarter earnings today.
Company: Scientific Games Corp. (NASDAQ: SGMS)
Revenue: $671.6 million, compared to $415.6 million in the third quarter last year, which finished before the company completed its acquisition of Bally Technologies Inc. In the second quarter this year, revenue from the merged company was $691.5 million.
Loss: $678.2 million, compared to a loss of $69.8 million in the third quarter last year. Scientific Games said its net income was hurt by steep noncash goodwill and intangible asset impairment charges this year.
Loss per share: $7.88, compared to a loss per share of 82 cents one year earlier.
What it means: Despite the big net loss, the company said it remains on track to create substantial cost savings because of its merger with Bally. Scientific Games has implemented $194 million of the $200 million in annual savings it expects as a result of that merger, according to a company statement.
CEO Gavin Isaacs said that much of the hard work related to combining the two businesses is wrapped up.
"With an expanding portfolio of innovative new products, systems and services ahead of us, and the heavy lifting of integration mostly behind us, our team successfully accomplished in just eight months what we had originally expected to achieve in a year,” Isaacs said in the statement.
Scientific Games’ business is divided into three segments: gaming, lottery and interactive. As expected, the foremost category has seen massive growth due to the integration of the slot maker Bally: Gaming revenue went from $164.4 million in the third quarter last year to $429.1 million this year. That included $286.7 million from Bally, the company statement said.
In the lottery segment, meanwhile, revenue dropped from $212.7 million last year to $191.3 million in the third quarter this year. Scientific Games said that included a $3.2 million decline in services revenue and a $25 million drop in lottery systems product sales. Revenue from instant games, however, rose by $6.8 million.
Interactive segment revenue increased $12.7 million from last year to $51.2 million. That included $8.6 million in revenue from Bally and a $4.1 million revenue increase from Scientific Games’ pre-existing interactive business.