International Game Technology, a major slot machine and lottery company, reported its third-quarter earnings today.
Company: International Game Technology PLC (NYSE: IGT)
Revenue: $1.2 billion, up 30 percent from the third quarter of 2014.
The company in its current form was created by a $6.4 billion merger of the Italian lottery operator Gtech and slot machine company IGT. That merger wrapped up in April, meaning IGT’s reported revenue compares its combined performance this year to the results last year from only Gtech, which acquired IGT.
On a more comparable, “constant currency basis” combining IGT and Gtech’s results from last year, too, revenue dropped 10 percent.
IGT attributed that to an “expected decrease in gaming product sales,” pointing specifically to big sales in Oregon last year, among other factors.
Earnings: $7.1 million, compared to $76.2 million in the third quarter last year. The merged company had significantly higher expenses this year than only Gtech did in 2014.
Earnings per share: 4 cents, compared to 44 cents last year.
What it means: Marco Sala, the CEO of IGT, said in a statement that the company was “pleased to report third-quarter profitability in line with our expectations in this year of transformation.”
IGT has four operating segments: North American gaming and interactive, North American lottery, Italian and international outside North America and Italy.
IGT said its North American gaming and interactive revenue rose to $341 million in the third quarter this year versus $37 million last year, thanks to the merger. On a more comparable basis, revenue in this segment actually declined 19 percent year over year, which IGT said was due largely to “difficult comparisons” to last year.
North American lottery revenue, meanwhile, rose 6 percent from last year to $253 million. But that’s actually down 2 percent on a more comparable basis, IGT said, pointing to the fact that it “entered into a revised termination agreement with the Illinois Lottery” in this year’s third quarter. Without that settlement, comparable revenue rose 2 percent year over year.
In Italy, IGT’s revenue was $414 million this year, down from $525 million last year, mostly because the euro weakened in comparison to the dollar. Revenue still dropped 8 percent regardless of that currency translation, IGT said, because of “the anticipated impact of gaming machine taxes” as well as growth in sports betting payout of 6 percentage points.
And international revenue was $211 million this year versus $138 million last year because of the merger, but it declined 12 percent on a more comparable basis.
IGT said it again faced “challenging comparisons” because of “large conversion and systems sales” one year ago.