IGT grows revenue, reports $73.5 million profit in 4th quarter

An exterior view of International Game Technology headquarters at 6355 S. Buffalo Drive on Thursday, Aug. 13, 2015.

Slot machine and lottery company International Game Technology reported its fourth-quarter and full-year earnings on Thursday.

Company: International Game Technology PLC (NYSE: IGT)

Revenue: $1.37 billion for the fourth quarter, up 44 percent from the same time period in 2014.

The company was created by the $6.4 billion merger between Gtech, an Italian lottery operator, and IGT, a slot machine company. Gtech acquired IGT in the merger, which wrapped up in April, and the combined company assumed the IGT name.

On a more comparable “constant currency” basis that presents the combined results of both companies, revenue grew 5 percent year over year in the fourth quarter. For the full year, revenue fell 4 percent from 2014 using the same type of comparison.

The company attributed the annual decline mainly to lower gaming product sales and service revenues.

Earnings/loss: IGT reported net income of $73.5 million for the fourth quarter, compared to a $150.6 million net loss in the fourth quarter of 2014. For the full year, the company reported a net loss of $75.6 million, compared to net income of $86.2 million in 2014.

Earnings/loss per share: The company reported earnings of 37 cents per share in the fourth quarter, compared to a loss of 87 cents per share in 2014. For the full year, IGT reported a loss of 39 cents per share, compared to earnings of 49 cents per share in 2014.

What it means: CEO Marco Sala said 2015 was a “year of transformation” that ended with a strong fourth quarter.

“We established IGT as the global gaming leader with a commitment to being a customer-first organization and to deliver the content, technology, and expertise that drives player demand,” he said in a statement. “We are confident that we have established a solid foundation from which we can continue to lead the gaming industry and grow our business.”

IGT’s business is separated into four main operating segments: North American gaming and interactive, North American lottery, Italy and international outside North America and Italy.

IGT said its North American gaming and interactive segment reported revenue of $378 million in the fourth quarter, compared to $45 million a year earlier.

But on a more comparable “constant currency” basis combining IGT and Gtech in 2014, too, revenue was down 1 percent year over year. The company said its comparable service revenue fell 4 percent from 2014 because of a lower installed base, although product sales grew 6 percent.

Revenue from the North American lottery segment was $269 million in the fourth quarter, 20 percent higher than 2014 on a reported basis and 10 percent higher when combining Gtech and IGT for both periods.

Comparable service revenue grew 8 percent, partly because of favorable same-store revenue growth driven by “strong instant ticket sales and solid draw-based game performance,” the company said. Strong Powerball sales were “more than offset” by a drop in Mega Millions sales, according to IGT, but product sales were almost twice as much as in 2014.

In Italy, meanwhile, IGT reported $455 million in revenue for the fourth quarter, compared to $489 million in 2014, which the company said was due to the U.S. dollar’s improved strength against the euro. Currency translation aside, Italian revenue rose 6 percent.

International revenue for the fourth quarter was $265 million, down 38 percent from 2014 on a reported basis and up 5 percent on a more comparable “constant currency” basis, “primarily on strong gaming product sales,” according to the company.